Question

Delish Foods sells jars of special spices used in Italian cooking. The variable cost is

$ 1.00$1.00

per unit. Fixed costs are

$ 10 comma 000 comma 000$10,000,000

per year. It has

$ 40 comma 000 comma 000$40,000,000

of average​ assets, and the desired profit is a

55​%

return on assets. Delish Foods sells

4 comma 000 comma 0004,000,000

units per year. The company uses

costminus−plus

pricing because it is the only company that produces this kind of product. Using

costminus−plus

pricing​ methodology, determine the sales price per unit.​ (Round your answer to the nearest​ cent.)

A. $ 1.00$1.00

B. $ 3.50$3.50

C. $ 1.20$1.20

D. $ 4.00

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.