A Custom Tailor Wishes to Use Target Profit Pricing to Establish

Multiple Choice

A custom tailor wishes to use target profit pricing to establish a price for a custom-designed business suit. Assume variable cost is $200 per suit, fixed cost is $44,000, and the target profit is $50,000 based on a volume of 50 suits. What price should be charged for a typical custom suit?

A) $520
B) $1,040
C) $1,880
D) $2,080
E) $10,000