Flyer Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost per unit for the product is $44 per unit. What is the desired profit per unit?
A) $6
B) $8
C) $5
D) $4

Question

Quizplus · Accepted Answer

The desired profit per unit is $6. This is calculated by multiplying the desired profit margin (12.5%) by the selling price per unit ($48).

Flyer Company Sells a Product in a Competitive Marketplace