Question

The FACTS Company uses cost-plus pricing with a 0.42 mark up. The company is currently selling 100,000 units. Each

unit has a variable cost of $3.20. In addition, the company incurs $193,400 in fixed costs annually. If demand falls to 84,000 units and the company wants to continue to earn a 0.42 return, what price should the company charge? 

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