The Dynamaco Company uses cost-plus pricing with a 50% mark-up. The company is currently selling 100,000 units at $12 per unit. Each unit has a variable cost of $6. In addition, the company incurs $200,000 in fixed costs annually. If demand falls to 80,000 units and the company insists on a 50% mark-up, what price should the company charge?
a. $12.75
b. $14.55
c. $13.50
d. $10.95