Avocado Ltd produces small electronic components for kitchen appliances. This year it expects to produce 10 000 units of component X. The variable manufacturing cost of component X represents 50% of its total costs. The target profit is $2 per unit. Using the cost-plus pricing approach based on total costs, the selling price per unit of component X is $20. If Avocado Ltd decides to change its cost-plus pricing approach to base the mark up percentage on variable manufacturing costs, the selling price for each unit of component X will be:

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The Answer of Avocado Ltd produces small electronic components for kitchen appliances. This year it expects to produce 10 000 units of component X. The variable manufacturing cost of component X represents 50% of its total costs. The target profit is $2 per unit. Using the cost-plus pricing approach based on total costs, the selling price per unit of component X is $20. If Avocado Ltd decides to change its cost-plus pricing approach to base the mark up percentage on variable manufacturing costs, the selling price for each unit of component X will be:

Avocado Ltd Produces Small Electronic Components for Kitchen Appliances