NBG produces shoes. Every month, the company has a cost of$10,000 for rent, utilities, and maintenance of machinery. Inaddition, the company estimates that each pair of shoes costs $8 toproduce. Assume demand is 500 pairs. What price must theycharge per unit to make $3,000 in profit?
A.
$31
B.
$34
C.
$28
D.
$25
Consider the NBG company example again. Assumeselling prices is $27 per pair, the cost to produce each pair ofshoes is $11, and demand is estimated to be 700 pairs. Whatshould be the fixed cost to breakeven?
$13,250
$11,200
$11,820
$10,360
Expert Answer
Answer 1:
- Option B: $34
Explanation:
- Total cost= cost of goods sold + fixed cost =(demand*unit cost)+10000 = (500*8) + 10000 =
OR
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