The marketing manager of griffin corporation has determined that a market exists for a telephone with a sales price of $36 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 griffin desires to earn a $150,000 profit from the phone sales. how much can griffin afford to spend on variable cost per unit if production and sales equal 50,000 phones?

The $18 per unit can Griffin afford to spend on variable cost per unit if production and sales equal 50,000 phones.

Explanation:

Since the net income equals to

Contribution - Fixed cost  = Net income

where,

Contribution = Sales - variable cost

So, by using the above equation, the following information is given below:

Sales price = $36 per unit

Fixed cost = $450,000

Net income = $150,000

Units  = 50,000 phones

By using above information, we can calculate the contribution

Contribution = Fixed cost + Net income

                     = $450,000 + $150,000

                    = $600,000

Since, variable cost is not given. So we assume variable cost per unit be X.

So,

Units = Contribution amount ÷ (Sale Price - Variable cost per unit )

50,000 phones = $600,000 ÷ ($36 - X )

($36 - X ) = $600,000 ÷ 50,000 phones  

So X would be $18 per unit

Means, the variable cost is $18 per unit.

Hence, $18 per unit can Griffin afford to spend on variable cost per unit if production and sales equal 50,000 phones.

drop shippers;

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.