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 58

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 price should Maker Sun Chairs charge in order to maximize its profit?

• A)$45
• B)$44
• C)$43
• D)$42

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Definitions:

Long-Term Liabilities

financial obligations of a company that are due more than one year in the future, including bonds payable, long-term lease obligations, and pension liabilities.

Service Department Charges

Expenses allocated to a company's operational departments that provide support or services to other internal departments rather than directly to customers.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding cost of goods sold, and may include rent, utilities, and salaries.

Departmental Expenses

Costs that are directly incurred by a specific department within an organization.