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Jessup Company expects to incur overhead costs of $20,000 per month and direct production costs of $125 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $50 per unit, the sales price per unit would be which of the following amounts?
1) $175
2) $195
3) $415
4) $290

Respuesta :

Answer:125+50=175

Explanation: REASON:

20000/1000=20 is ignored because it's overhead cost which shouldn't be included in the gross profit ;

So correct answer is :

production cost +gross profit=sales

125+50=175

The sales price per unit would be of amount $415.

What is the calculation of sales price?

The computation of direct production costs would be;

[tex]1000*125\\=125,000[/tex]

The Fixed Overhead costs would be;

[tex]20,000*12\\=240,000[/tex]

Therefore, the total cost for the year is;

[tex]125,000+240,000\\=365,000[/tex]

The desirable Gross Profit for business are;

[tex]1000*50\\=50000[/tex]

Hence, the total sales value desired would be derived by adding profits and cost;

[tex]365,000+50,000\\=415,000[/tex]

Finally, the sales price per unit is;

[tex]\frac{415,000}{1000} \\=415[/tex]

Learn more about sales prices here:

https://brainly.com/question/15830027

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