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Wilkes Manufacturing sells one product with a variable unit cost of $18. The company knows...

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Accounting

Wilkes Manufacturing sells one product with a variable unit cost of $18. The company knows that the price charged will affect demand. Fixed costs are $265,000. If sales exceed 50,000 units, the company will need to lease additional manufacturing space and equipment at an additional cost of $30,000 per year. The following chart represents the estimated demand at various price levels:

Units Demanded Unit Price

25,000 $30

50,000 $28

75,000 $25

100,000 $23

Based on this information which of the following statements is true?

A. Selling the units at $23 per unit will generate the largest profit.

B. Selling the units at $28 per unit will generate the largest profit.

C. Selling the units at $30 per unit will generate the largest profit.

D. Selling the units at $25 per unit will generate the largest profit.

E. None of the above

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