What should the unit price be

Reference no: EM13129791

Cara Industries incurred the following costs for 50,000 units:

Variable costs $90,000
Fixed costs 120,000

Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4,250 for shipping.

If Cara wants to earn $4,000 on the order, what should the unit price be?
A. $5.85
B. $2.60
C. $3.45
D. $1.65

Reference no: EM13129791

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