Newton Company Currently Produces and Sells 4,000 Units of a Product

question 12

Multiple Choice

Newton Company currently produces and sells 4,000 units of a product that has a contribution margin of $6 per unit.The company sells the product for a sales price of $20 per unit.Fixed costs are $18,000.The company is considering investing in new technology that would decrease the variable cost per unit to $8 per unit and double total fixed costs.The company expects the new technology to increase production and sales to 9,000 units of product.What sales price would have to be charged to earn a $99,000 target profit assuming the investment in technology is made?

• A) $22
• B) $23
• C) $15
• D) $13

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Definitions:

Consequent

In logic, the latter part of a conditional statement, the outcome or result that follows the condition specified in its antecedent.

Antecedent

In logic and grammar, the preceding statement or element that provides the context for a subsequent statement or element.

Proposition

A statement or assertion that expresses a judgment or opinion, or in logic, the content of an assertion that can be true or false.

Standard Form

A recognized format for presenting arguments or statements in a structured and consistent manner.