Galla IncNeeds to Determine a Price for a New Product

question 7

Multiple Choice

Galla Inc.needs to determine a price for a new product.Galla desires a 25% markup on the total cost of the product.Galla expects to sell 5,000 units.Additional information is as follows: $$\begin{array}{l}\begin{array} { l l r } \text { Variable product cost per unit}&\$15\\\text { Variable administrative cost per unit}&10\\\text { Total fixed overhead}&45,000\\\text { Total fixed administrative}&18,000\end{array}\end{array}$$ Using the total cost method what price should Galla charge?

• A)$56
• B)$47
• C)$62
• D)$30
• E)$42

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