The Tessmer Company has fixed costs of $400,000 and variable costs are 75% of the selling price. To realize profits of $100,000 from sales of 500,000 units, the selling price per unit: A. Must be $1.33 B. Must be $4.00 C. Must be $1.00 D. Is indeterminable

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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The Tessmer Company has fixed costs of
$400,000 and variable costs are 75% of
the selling price. To realize profits of
$100,000 from sales of 500,000 units, the
selling price per unit:
A. Must be $1.33
B. Must be $4.00
C. Must be $1.00
D. Is indeterminable
Transcribed Image Text:The Tessmer Company has fixed costs of $400,000 and variable costs are 75% of the selling price. To realize profits of $100,000 from sales of 500,000 units, the selling price per unit: A. Must be $1.33 B. Must be $4.00 C. Must be $1.00 D. Is indeterminable
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