Smith Inc. produces and sells bicycles. They are expecting to sell 235,000 units this year. Their variable costs are $85 per unit and their fixed costs are $1,250,000.
a) If they would like to earn 35% per unit, at what price should they sell the bicycles?
b) What price should they set to earn 35% if the fixed costs were $1,100,000?
c) What if the fixed costs were $1,100,000 and they wanted to earn 42% per unit?