SunDevil Co.plans to sell 200,000 special Rose Bowl footballs with fixed costs of $400,000 and variable expenses at 60% of sales.To have a net income of $100,000 SunDevil management must set the sales price at

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To achieve a net income of $100,000, SunDevil Co. needs to cover both fixed costs ($400,000) and the desired net income ($100,000), totaling $500,000. With variable expenses at 60% of sales, the contribution margin is 40%. To find the sales price per unit, divide the total required contribution margin ($500,000) by the number of units (200,000), resulting in $2.50 per unit. Since this is 40% of the sales price, the sales price must be $2.50 / 0.40 = $6.25.