Question

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Answer 1

Answer:

$48

Explanation:

According to the information presented, we must look for the equilibrium price for the desired level of income

The following equation should be performed

Profits = (Quantity . Sale price - Quantity x Unit cost)  - total Fixed Costs

in this case.

38,000 = (16,000. X - 16,000. 30) - 250,000

288.000= 16,000X- 480,000

768,000 / 16,000 = x

48 = X