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C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
78% (02:45) correct
22%
(02:43)
wrong
based on 111
sessions
History
Date
Time
Result
Not Attempted Yet
ABC Car Company wants to manufacture a new car known as Model X, and it is trying to determine how many cars it needs to sell in order to make an annual profit of $30,500,000. The annual fixed costs for Model X total $50,200,000. In addition, each Model X car has an average cost of $5,000 per vehicle to manufacture. If the Company forecasts it will sell 20,000 Model X cars this year, at what price must the Company sell the car to achieve the desired annual profit?
A. $4,035
B. $4,036
C. $9,035
D. $16,140
E. $36,140
Source: 800 Score
A. $4,035
B. $4,036
C. $9,035
D. $16,140
E. $36,140
Source: 800 Score
04 Sep 2025, 03:27
Kudos
Bookmarks
Answer should be $9,035 - (C)
Let the selling price per vehicle be p.
Total fixed costs = 50,200,000
Total variable costs = 5,000*20,000 = 100,000,000
We know that, Sales - Fixed costs - Variable costs = Profits
So,
20,000p - 50,200,000 - 100,000,000 = 305,000,000
On solving, we get p = 180,700,000/20,000 = $9,035.
Let the selling price per vehicle be p.
Total fixed costs = 50,200,000
Total variable costs = 5,000*20,000 = 100,000,000
We know that, Sales - Fixed costs - Variable costs = Profits
So,
20,000p - 50,200,000 - 100,000,000 = 305,000,000
On solving, we get p = 180,700,000/20,000 = $9,035.
04 Sep 2025, 06:47
Kudos
Bookmarks
Bunuel
We need to make an Annual Profit of $30,500,000.
The fixed cost = $50,200,000.
Average cost per vehicle = $5000
Total vehicles sold = 2000.
Total cost = $5000*2000 = 100,000,000.
Since we make a profit of $30,500,000.
The total selling price = $30,500,000+100,000,000 + $50,200,000 = $ 180,700,000.
Price per vehicle = $ 180,700,000 / 2000
= $ 9035 ( Option C)
