Ragtown Grill Uses Cost-Plus Pricing with a 40% Mark-Up

question 5

Multiple Choice

Ragtown Grill uses cost-plus pricing with a 40% mark-up.The company is currently selling 20,000 units annually, but has a capacity of 30,000 units.Each unit has a variable cost of $15.In addition, the company incurs $60,000 in fixed costs annually.For how much is the company selling each unit?

• A)$25.20
• B)$21.00
• C)$24.00
• D)$23.80

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