Davis Company Has $20 Per Unit in Variable Costs and $800,000

question 20

Multiple Choice

Davis Company has $20 per unit in variable costs and $800,000 per year in fixed costs.Demand is estimated to be 400,000 units per year.What is the desired price per unit if a markup of 30% on total cost is used to determine the price?

• A)$26.00
• B)$37.40
• C)$28.60
• D)$34.00
• E)None of the answer choices is correct.

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Definitions:

Resale Revenue

Income generated from selling previously owned or used goods.

Recycling Revenue

The income generated from selling recycled materials, often contributing to cost savings and environmental sustainability.

Processing Cost

The expenses associated with the operation needed to convert raw materials into finished products.

Disposal Cost

Expenses associated with the process of disposing of waste, obsolete inventory, or equipment, including transportation, recycling, or landfill fees.