Question

ZZZ Company produces and sells three products. Information
about these products for the month of May is given below:

                             Product A       Product B
selling price per unit          $16             $14      
variable costs per unit         $ 7             $ 6         
number of units sold           20,000          25,000

                             Product C
selling price per unit          $20 
variable costs per unit         $15
number of units sold           24,000

ZZZ Company reported total fixed costs of $166,000 in May.

In order to improve profitability, ZZZ Company made the
following changes in June:

1.  adjusted the selling price of Product B
2.  increased the advertising for Product B by $30,000

These changes resulted in the number of units of Product B
that were sold doubling. However, these changes also 
resulted in the sales of Product A decreasing by 30% as
some customers started buying Product B instead of Product
A. Assume the sales of Product C were not impacted by these
changes.

Calculate the selling price per unit for Product B needed in
June in order for the June net income to be the same as the
May net income.

Answer 1