Question - 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) $1.65
B) $5.85
C) $2.60
D) $3.45