Lady Marion Seafood, Inc.sells 5-pound packages of Alaska salmon.Assume its variable costs per package is $30, and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should it charge for a five-pound package of salmon?

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Quizplus · Accepted Answer

To find the price per package, use the formula: Price = (Fixed Costs + Target Profit + (Variable Cost per Package * Number of Packages)) / Number of Packages. Plugging in the values: Price = ($250,000 + $38,000 + ($30 * 16,000)) / 16,000 = $48.00.