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Thor Lab supplied hospitals with a comprehensive diagnostic kit for $100. At a volume of 100,000 kits, Thor had variable costs of $82 per unit
Thor Lab supplied hospitals with a comprehensive diagnostic kit for $100. At a volume of 100,000 kits, Thor had variable costs of $82 per unit and a profit before income taxes of $350,000. Because of an adverse legal decision, Thor's liability insurance will increase by $800,000. Assuming the volume and other costs are unchanged, what should the new price be if Thor is to make the same $350,000 profit before income taxes?
A. $100.00
B. $108.00
C. $144.44
D. Cannot solve. Fixed costs not known.
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