Question:
During last year, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 80,000 kits, Thor had fixed expenses of $1,000,000 and net operating income of $200,000. Because of an adverse legal decision, Thor"s liability insurance expenses this year will be $1,200,000 more than they were last year. Assuming that the volume and other costs are unchanged, what should be the sales price this year if Thor is to make the same $200,000 net operating income?
A) $120
B) $135
C) $150
D) $240