Garden Corporation Uses Cost-Plus Pricing with a 30% Mark-Up

question 106

Multiple Choice

Garden Corporation uses cost-plus pricing with a 30% mark-up.The company is currently selling 12,000 units at $21.45 per unit.Each unit has a variable cost of $11.50.In addition, the company incurs $60,000 in fixed costs annually.If demand falls to 10,000 units, how much will the company have to charge per unit in order to earn the same annual profit?

• A)$22.45
• B)$21.45
• C)$23.44
• D)$22.75

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