LO 3-2 Exercise 3-9B Prestige pricing Leon Company is considering the production and sale of a new product with fixed costs of $32,000 and variable cost of 7 per unit. Based on its normal profit margins, Leon desires to earn a $40.000 profit and believes it can sell 8,000 units of the product. Required a. Based on this information, determine the target sales price. b. Explain how prestige pricing could be used to increase profitability, EXHIBIT 3.3 Spreadsheet Report to Facilitate What-lf Analysis Gm win . Con ya et Det Sara Cla E F G H B Selling Price = $ D 28.00 If Fixed Cost is While Variable Cost is 2,000 And Sales Volume is 3,000 4,000 5,000 Then Profitability Will Be 6,000 $ $ 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 20,000 20,000 20,000 30,000 30,000 30,000 40,000 40,000 40,000 11 12 13 11 12 13 11 12 13 $14,000 $31,000 $48,000 $65,000 $82,000 12,000 28,000 44,000 60,000 76,000 10,000 25,000 40,000 55,000 70,000 4,000 21,000 38,000 55,000 72,000 2,000 18,000 34,000 50,000 66,000 15,000 30,000 45,000 60,000 (6,000) 11,000 28,000 45,000 62,000 (8,000) 8,000 24,000 40,000 56,000 (10,000) 5,000 20,000 35,000 50,000 Sheet