Question

You produce 800 mills per day at a unit cost of 85 cents. Due to an...

 You produce 800 mills per day at a unit cost of 85 cents. Due to an oversight, he lost 25% of production. The operation has a fixed cost of $ 900.00 and a variable cost per unit of 40 ¢.

a) Determine the new cost per unit, considering the loss of production.

b) Determine the new sale price, if you want to earn $ 800.00 per day, considering the loss of production.
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Answer #1

You produce 800 mills per day at a unit cost of 85 cents. Due to an oversight, he lost 25% of production. The operation has a fixed cost of $ 900.00 and a variable cost per unit of 40 ¢.

a) Determine the new cost per unit, considering the loss of production.

Total production cost for 800 units = 900 + 0.40 * 800 = 1220

Good units = 800 - 25% = 600

new cost per unit = 1220 / 600 = 2.033

b) Determine the new sale price, if you want to earn $ 800.00 per day, considering the loss of production.

new sale price = ( Production cost + profit ) / Number good units

Production cost = 1220

profit = 800

Number good units = 600

new sale price = ( 1220 + 800 ) / 600 = 2020 / 600 = $3.37

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