Question
Hayes Company operated at normal capacity during the current year, producing 51728 units of its single product. Sales totaled 38296 units at an average price
Hayes Company operated at normal capacity during the current year, producing 51728 units of its single product. Sales totaled 38296 units at an average price of $22.85 per unit. Variable manufacturing costs were $11.14 per unit, and variable marketing costs were $5.25 per unit sold. Fixed costs were incurred uniformly throughout the year and amounted to $175822 for manufacturing and $61284 for marketing.
If Hayess variable manufacturing costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same contribution margin ratio as before the cost increase?
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