Answer:
Option D => $170.
Step-by-step explanation:
From the question above, we are given the following information or data;
''Variable manufacturing costs $40,000 Variable selling and administrative costs $20,000 Fixed manufacturing costs $160,000 Fixed selling and administrative costs $120,000 Investment $1,700,000 ROI 30% Planned production and sales 5,000 pairs"
The gross profit = Investment × Return on Investment = $1,700,000 × 30% = 510000.
$40,000
$20,000
Total Var costs = (Variable manufacturing costs) + (Variable selling and administrative costs).
Total Var costs = $40,000 + $20,000
Total Var costs =$ 60,000.
Therefore, Var cost = 60,000/5000 = $12 pu
Total Fixed cost = (Fixed manufacturing costs) + ( Fixed selling and administrative costs).
Total Fixed cost = $160,000 + $120,000 = $280,000.
Target profit = gross profit - Fixed Cost.
= 510,000 + 280,000 = 790,000.
Hence, = 790,000/5000 = $158.
So, 158 + 12 = $170.