Summit Innovations Inc. has a factory with fixed costs of $800,000 and a production capacity of 250,000 units annually. Its product has a contribution margin of 30%. The target profit is $500,000. At full production, what does the selling price per unit need to be?

Summit Innovations Inc. has a factory with fixed costs of $800,000 and a production capacity of 250,000 units annually. Its product has a contribution margin of 30%. The target profit is $500,000. At full production, what does the selling price per unit need to be?

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 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Please help me solve this financial accounting problem with the correct financial process.

Summit Innovations Inc. has a factory with fixed
costs of $800,000 and a production capacity of
250,000 units annually. Its product has a
contribution margin of 30%. The target profit is
$500,000. At full production, what does the selling
price per unit need to be?

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