Campbell Manufacturing Incurs Annual Fixed Costs of $250,000 in Producing

Multiple Choice

Campbell Manufacturing incurs annual fixed costs of $250,000 in producing and selling a single product.Estimated unit sales are 125,000.An after-tax income of $75,000 is desired by management.The company projects its income tax rate at 40 percent.What is the maximum amount that Campbell can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at $6?

A) $3.37
B) $3.59
C) $3.00
D) $3.70