The Ivring Berlin Learning Center would like a possible net profit of $650,000 on its new resource manual it sells to schools. The fixed costs for producing the manual are $780,000 and the variable cost per package is $19.85. If the estimated unit sales are 1,250,000 units, what selling price unit should the Ivring Berlin Learning Center try?

Question

Noah Roman

Mathematics

3 February, 00:04

The Ivring Berlin Learning Center would like a possible net profit of $650,000 on its new resource manual it sells to schools. The fixed costs for producing the manual are $780,000 and the variable cost per package is $19.85. If the estimated unit sales are 1,250,000 units, what selling price unit should the Ivring Berlin Learning Center try?

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Answers (1)

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Tamia Clements · Answer 1

Selling price should be $21 per unit.

Step-by-step explanation:

Cost price of manual = Fixed price + variable cost per package*Number of units sold

= 780000+19.85*1250000 = $25592500

Now we know Learning center wants a profit = $650000

Then profit = sale price - cost price

650000=sale price - 25592500

Sale price = 650000+25592500 = $26242500

This is the sale price of 1250000 units then selling price per unit should be = Total selling price/Number of units sold

= $26242500/1250000 = 20.994 or $21

Selling price should be $21 per unit.