Thomas Industrial Products is considering offering a special one-time deal to its best customers. The company expects this offering to increase its total sales from 1,400 units to 1,550 units. The variable cost per unit is $134.31. The total fixed cost is $125,000. If the company is willing to accept the lowest possible price without losing money, it should charge a price equal to:
A) $134.31 + ($125,000/1,550).
B) $134.31 + ($125,000/1,400).
C) $125,000/1,400.
D) $125,000/1,550.
E) $134.31.

Question

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The Answer of Thomas Industrial Products is considering offering a special one-time deal to its best customers. The company expects this offering to increase its total sales from 1,400 units to 1,550 units. The variable cost per unit is $134.31. The total fixed cost is $125,000. If the company is willing to accept the lowest possible price without losing money, it should charge a price equal to:
A) $134.31 + ($125,000/1,550).
B) $134.31 + ($125,000/1,400).
C) $125,000/1,400.
D) $125,000/1,550.
E) $134.31.

Thomas Industrial Products Is Considering Offering a Special One-Time Deal