Baird Enterprises produces a product with fixed costs of $34,000 and variable cost of $3.60 per unit. The company desires to earn a $23,000 profit and believes it can sell 10,000 units of the product. Based on this information, determine the target sales price

Selling price= $9.3 per unit

Explanation:

Giving the following information:

Baird Enterprises produces a product with fixed costs of $34,000 and a variable cost of $3.60 per unit. The company desires to earn a $23,000 profit and believes it can sell 10,000 units of the product.

To calculate the selling price, we need to use the break-even point formula:

Break-even point= (fixed costs + desired profit)/ contribution margin

10,000= (34,000 + 23,000) / (selling price - 3.6)

10,000X - 36,000= 57,000

10,000X= 93,000

X= $9.3 per unit

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