Question
Accents Associates sells only one product, with a current selling price of $210 per unit. Variable costs are 60% of this selling price, and fixed
Accents Associates sells only one product, with a current selling price of $210 per unit. Variable costs are 60% of this selling price, and fixed costs are $50,000 per month. Management has decided to reduce the selling price to $205 per unit in an effort to increase sales. Assume that the cost of the product and fixed operating expenses are not changed by this reduction in selling price.
At the current selling price of $210 per unit, what dollar volume of sales per month is required for Accents to earn a monthly operating income of $10,000? |
$50,000. | |||||||||||||||||||
$166,667. | |||||||||||||||||||
$150,000. | |||||||||||||||||||
Some other amount.
|
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