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RST Company has a factory with fixed costs of $750,000 and a production capacity of 200,000 units annually. Its product sells with a 25% contribution margin. The target profit is $450,000. At full production, what does the selling price per unit need to be? Show your complete solution.

RST Company has a factory with fixed costs of $750,000 and a production capacity of 200,000 units annually. Its product sells with a 25% contribution margin. The target profit is $450,000. At full production, what does the selling price per unit need to be? Show your complete solution.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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RST Company has a factory with fixed costs of $750,000 and a production capacity of 200,000 units annually. Its product sells with a 25% contribution margin. The target profit is $450,000. At full production, what does the selling price per unit need to be? Show your complete solution.
Transcribed Image Text:RST Company has a factory with fixed costs of $750,000 and a production capacity of 200,000 units annually. Its product sells with a 25% contribution margin. The target profit is $450,000. At full production, what does the selling price per unit need to be? Show your complete solution.
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