If a product costs $10 to produce,the firm expects 10% margin on the cost to produce and transportation per unit costs $2,what is the least price the firm is likely to accept for the product?

Question

Quizplus · Accepted Answer

First, we need to calculate the profit that the firm expects to make on each unit:

10% of $10 = $1

Adding the transportation cost of $2, the total cost per unit is $10 + $2 + $1 = $13.

Therefore, the least price the firm is likely to accept for the product is $13. The closest option is C, $13.00.

If a Product Costs $10 to Produce,the Firm Expects 10