Problem
I'm reposting this question. It has already been answered on Chegg but the expert arrived at $7.5 as the selling price per unit and that answer checks as wrong in the schools auto grader. I worked the problem and came up with a needed selling price of $62.86 which may also be wrong. The needed selling price is to be rounded to three decimal places.
Parks Castings Inc. will manufacture and sell 220,000 units next year. Fixed costs will total $330,000, and variable costs will be 40 percent of sales.
a. The firm wants to achieve a level of earnings before interest and taxes of $300,000. What selling price per unit is necessary to achieve this result? (round answer to three decimal places)
b. Set up an analytical income statement to verify your solution to part a.