Maker Sun Chairs Is Trying to Determine the Optimal Price $$\begin{array} { c c } \text { Unit Price } & \text { Unit Dem and } \\\$ 45 & 7,200 \\\$ 44 & 7,800 \\\$ 43 & 8,400 \\\$ 42 & 8,800\end{array}$$

question 92

Multiple Choice

Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs.The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit.Maker Sun Chairs has determined that the following relationships exist between price and demand: $$\begin{array} { c c } \text { Unit Price } & \text { Unit Dem and } \\\$ 45 & 7,200 \\\$ 44 & 7,800 \\\$ 43 & 8,400 \\\$ 42 & 8,800\end{array}$$ What is the anticipated profit at a price of $43?

• A)$134,400
• B)$14,400
• C)$194,400
• D)$361,200

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Definitions:

Income Report

An income report, commonly known as an income statement, is a financial document that shows a company's revenue, expenses, and net income over a specific period.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset during the lease term.

Constructively Capitalize

The accounting practice of recognizing an expenditure as a fixed asset and amortizing it over time, despite not being capitalized in a traditional sense.

Operating Leases

A pact that grants permission to use a property without bestowing ownership rights of the said asset.