Answer:
In the attached the fixed costs is $12,000,000
selling price is $41.50
variable cost is $12.80
The price for the target EBIT of $15 million is $167.09
Explanation:
target units=fixed costs+target EBIT/selling price-variable cost
target units is 175,000
fixed costs of $12,000,000
target EBIT of $15,000,000
variable cost is $12.80
selling price is unknown,let assume is X
175,000=($12,000,000+$15,000,000)/X-12.80
175,000=27,000,000/X-12.80
175,000*(X-12.80)=27,000,000
X-12.80=27,000,000/175,000
X-12.80=154.29
X=154.29+12.80
X=$167.09
EBIT=Sales units*(selling price-variable cost)-fixed costs
