Yummy Foods Sells Jars of Special Spices Used in Spanish

question 15

Multiple Choice

Yummy Foods sells jars of special spices used in Spanish cooking. The variable cost is $1 per unit. Fixed costs are $9,000,000 per year. It has $40,000,000 of assets, and investors expect a return of 5% on their assets. Yummy Foods sells 5,000,000 units per year. They use cost-plus pricing because they are the only company which produces this kind of product. Using cost-plus pricing methodology, determine the price per unit. (Round your answer to the nearest cent)

• A)$1.40
• B)$3.20
• C)$2.80
• D)$1.90