Determine new selling price in order to keep annual profit

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Annual sales of a given product are 8,000 units; the selling price is $8 per unit. Annual fixed production costs are $6,000 and the current annual profit is $18,000. The company is planning to invest to influence the sale of its product. The marketing department estimates that this new advertising campaign will increase total fixed costs by 15% and the unit variable cost by 25%. Sales are expected to be 9, 600 units per year. Determine the new selling price in order to keep the same annual profit.

Reference no: EM131389301

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