Smith Inc. produces and sells bicycles. They are expecting to sell 220,000 units this year. Their variable costs are $74 per unit and their fixed costs are $767,000.
a. If they would like to earn 23% per unit, at what price should they sell the bicycles?
b. What price should they set to earn 23% if the fixed costs were $2,100,000?
c. What if the fixed costs were $2,100,000 and they want to earn 38% per unit?