Nbg Produces Shoes Every Month Company Cost 10 000 Rent Utilities Maintenance Machinery Ad Q34302337

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 =
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