Multiple Choice Question 89

A company has $6.50 per unit in variable costs and $2.20 per unit in fixed costs at a volume of 40,000 units. If the company uses cost-plus pricing, which of the following should the company use to determine the price?

The company should use a unit cost of $8.70 per unit only at a volume of 40,000 units.

The company should use a unit cost of $6.50 per unit only at a volume of 40,000 units.

The company should use a unit cost of $8.70 at any volume level.

The company should use a unit cost of $8.70 at any volume within the relevant range.