In: Finance
. Smith Inc. produces and sells bicycles. They are expecting to sell 95,000 units this year. Their variable costs are $123 per unit and their fixed costs are $9,205,000. a. If they would like to earn 25% per unit, at what price should they sell the bicycles? b. What price should they set to earn 25% if the fixed costs were $8,000,000? c. What if the fixed costs were $8,000,000 and they want to earn 30% per unit?
a)
The selling price per unit of bicycle should be $274.87
b)
The selling price per unit of bicycle should be $259.01
c)
The selling price per unit of bicycle should be $269.37