You have the following information:
Sales Price: $100
Variable cost per unit: $40
Total fixed costs: $120,000
The company expects to sell 2,500 units next year. They don’t want to increase the sales price and the fixed costs can’t be changed. How much could they afford to pay in variable costs (per unit) if they want a pre-tax operating profit of $40,000?
Use commas. Two decimals. No $ signs