1.

Bonita Industries has the following costs when producing 100000 units:

Variable costs	$600000
Fixed costs	900000

An outside supplier is interested in producing the item for Bonita. If the item is produced outside, Bonita could use the released production facilities to make another item that would generate $230000 of net income. At what unit price would Bonita accept the outside suppliers offer if Bonita wanted to increase net income by $200000?

$5.70

$8.30

$6.30

$10.30

2. In cost-plus pricing, the target selling price is computed as

total unit cost + desired ROI per unit.

fixed cost per unit + desired ROI per unit.

variable cost per unit + fixed manufacturing cost per unit + desired ROI per unit.

variable cost per unit + desired ROI per unit.