Answer:
$68 = unitary variable cost
Explanation:
Giving the following formula:
Gold Company wants a profit of $100,000
Production= 2,500 units
Selling price= $125
Fixed indirect production costs 27,500
Fixed selling and administrative costs 15,000
<u>To calculate the target total unitary variable cost, we need to use the following formula:</u>
number of units sold= (desired profit + fixed costs) / (selling price - unitary variable cost)
2,500= (100,000 + 27,500 + 15,000) / (125 - unitary variable cost)
312,500 - 2,500unitary variable cost = 142,500
170,000 = 2,500unitary variable cost
$68=unitary variable cost
