The marketing manager of Adams Corporation has determined that a market exists for a telephone with a sales price of $23 per unit. The production manager estimates the annual fixed costs of producing between 41,000 and 81,300 telephones would be $621,200.

Assume that Adams desires to earn a $118,000 profit from the phone sales. How much can Adams afford to spend on variable cost per unit if production and sales equal 46,200 phones?

Variable Cost per Unit=