A Producer Incurred Costs of $54,000 for Labor and Materials

question 77

Multiple Choice

A producer incurred costs of $54,000 for labor and materials and $26,000 for fixed overhead expenses in a year. The firm produced 20,000 units during the year. If the producer desires a profit of $1 per unit in the coming year, what should the producer's selling price be using average-cost pricing?

• A) $3.70.
• B) $2.30.
• C) $5.00.
• D) $6.00.
• E) Cannot be determined from the information provided.

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