Question

Zion Sun Chairs manufactures 3,575 beach chairs each month. Determine the minimum sales price Zion Sun Chairs must sell each chair for to earn a monthly profit of $55,000, if the total monthly fixed costs are $17,363.50 and the variable cost per chair is $52.17. $72.41 $70.80 $25.38 $20.24

Answer 1

Answer:

• A) $72.41

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Find the total cost to produce 3575 chairs. It includes the fixed costs as well as the variable cost per chair.

• 17363.50 + 3575*52.17 =
• 203871.25

Add the profit we want to have

• 203871.25 + 55000 =
• 258871.25

This is the minimum amount to be made from sale.

Find minimum sales price per chair:

• 258871.25 / 3575 = 72.41 (rounded)

This is matching the first answer choice.