Question
The following data relates to a company's operating budget for its next operating year: Sales price per unit () 10 Sales volume (units) 15,000 Costs:
The following data relates to a company's operating budget for its next operating year:
Sales price per unit () | 10 |
Sales volume (units) | 15,000 |
Costs: | |
Materials () | 52,500 |
Labour () | 33,800 |
Energy () | 101,000 |
Depreciation () | 105,000 |
The budget has been prepared using the following assumptions:
Materials costs are variable. Labour costs are semi-variable with a fixed element of 15,000. Depreciation is a fixed cost. An allowance for an energy price increase of 12% has already been included in the energy costs.
The company now wishes to revise the data to incorporate the following updated assumptions:
Selling prices will be reduced by 12% The sales volume will increase by 11% The rise in the energy prices should be revised to 3%
What will be the company's new selling price per unit for the year?
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