Perry Corporation Has Been Producing and Selling 40,000 Caps a Year

Perry Corporation has been producing and selling 40,000 caps a year. The company has the capacity to produce 50,000 caps with its present facilities. The following information is also available: $\begin{array} { l } \text {Selling price per unit }& \$30\\ \text {Variable costs per unit: }& \\ \text {Manufacturing }&11 \\ \text { Selling and A dmini strative}& 5\\ \text {Fixed costs in total: }& \\ \text { Manufacturing}& \$128,000\\ \text { Selling and Admini strative }& 56,000\\\end{array}$
The least that Perry would be willing to sell a cap for in the short run would be:

A) $30.00
B) $14.00
C) $16.00
D) $20.40

Correct Answer:

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