Ideal Company Ideal Company Produces and Sells a Single Product

question 23

Multiple Choice

Ideal Company Ideal Company produces and sells a single product.Information on its costs follow:
$\begin{array}{ll}\text{Variable costs:}\\~~\text { SG\&A } & \$ 2 \text { per unit } \\~~\text { Production } & \$ 4 \text { per unit } \\\text { Fixed costs: } & \\~~\text { SG\&A } & \$ 12,000 \text { per year }\\~~\text { Production } & \$ 15,000 \text { per year } \end{array}$ Refer to Ideal Company.Assume Ideal Company produced and sold 5,000 units.At this level of activity,it produced a profit of $18,000.What was Ideal Company's sales price per unit?

• A)$15.00
• B)$11.40
• C)$9.60
• D)$10.00

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Definitions:

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.

Stocks

Shares of ownership in a company, entitling the shareholder to a portion of the company's profits and assets.

Repurchase Agreements

Short-term borrowing for dealers in government securities, where the dealer sells the securities to investors usually overnight and buys them back the following day at a slightly higher price.

Government Securities

Debt instruments issued by a government to finance its operations and projects, typically considered safe investments.