Question
Sultan Corporation operated at its normal capacity during the current year, producing 77,000 units of its single product. Sales totalled 67,000 units at an average
Sultan Corporation operated at its normal capacity during the current year, producing 77,000 units of its single product. Sales totalled 67,000 units at an average price of $20 per unit. Variable cost of goods sold amounted to $9 per unit, and sales commissions were paid out at $4 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $206,000 and fixed period costs, incurred uniformly, amounted to $35,000 per quarter. The break-even point in sales dollars is $988,571. If Sultans fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase?
A. $20.00.
B. $35.04.
C. $14.31.
D. $37.14.
E. $20.67
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