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The Crass Company uses cost-plus pricing with a 40% mark-up. The company is currently selling 20,000 units at $21 per unit. Each unit has a variable cost of $10. In addition the company incurs $100,000 in fixed costs annually. If demand falls to 16,000 units how much will the company have to charge per unit in order to earn the same annual profit?

A. $22.50

B. $21.75

C. $22.75

D. $23.75

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Accounting Basics, Accounting

Category:- Accounting Basics
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