A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be

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Academy of PakistanTest & Learning

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80AccountingMedium

A35.00

B24.00

C38.25

D37.50

Correct answer

B. 24.00

Explanation

24.00 is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be - Answer and Explanation | Academy of Pakistan