Cheshire Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Cheshire Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows: The non-value-added cost per unit is
A) $49.67.
B) $48.33.
C) $48.67.
D) $51.67.

Question

Cheshire Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Cheshire Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows:  The non-value-added cost per unit is
A) $49.67. 
B) $48.33. 
C) $48.67. 
D) $51.67.

Quizplus · Accepted Answer

The Answer of Cheshire Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Cheshire Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows:  The non-value-added cost per unit is
A) $49.67. 
B) $48.33. 
C) $48.67. 
D) $51.67.

Cheshire Cat Company Sells One of Its Products for $100