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Compute what should the unit price be

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Reference no: EM131812063

Question - Cara Industries incurred the following costs for 50,000 units:

Variable costs $90,000

Fixed costs 120,000

Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4,250 for shipping.

If Cara wants to earn $4,000 on the order, what should the unit price be?

A) $1.65

B) $5.85

C) $2.60

D) $3.45

Reference no: EM131812063

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