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How much durant afford to spend on variable cost per unit

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Reference no: EM131796249

Problem

The marketing manager of Durant Corporation has determined that a market exists for a telephone with a sales price of $30 per unit. The production manager estimates the annual fixed costs of producing between 40,000 and 80,000 telephones would be $450,000.

Required:

Assume that Durant desires to earn a $165,000 profit from the phone sales. How much can Durant afford to spend on variable cost per unit if production and sales equal 50,000 phones?

Reference no: EM131796249

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