Answer:
$3.38 per unit
Explanation:
Total costs:
= Total fixed cost + Total variable cost
= $9,000,000 + (5,000,000 units × $2 per unit)
= $9,000,000 + $10,000,000
= $19,000,000
Target revenue:
= Total costs - Desired profit
= $19,000,000 - ($42,000,000 × 5%)
= $19,000,000 - $2,100,000
= $16,900,000
Sales price per unit = Target revenue ÷ Total units
= $16,900,000 ÷ 5,000,000
= $3.38 per unit
