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    Pricing To Maximize Profits Using Cost Accounting

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    The Widger Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand. If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged in order to maximize profits? Units Sold Price 30,000 $10 40,000 $9 50,000 $8 60,000 $7.

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    Solution Summary

    Using an Excel 97-2003 spreadsheet, this solution illustrates how to use cost accounting to determine the optimal price at which to sell a product.