Spencer Company expects to sell 60,000 units next year. Variable production costs are $4 per unit, and variable selling costs are 10% of the selling price. Fixed expenses are $115,000 per year, and the company has set a target profit of $50,000. Based on this information, the unit selling price should be:

The answer is $7.50

Can you show me the work to get this answer??
thanks!!

KongTheKonqueror

Let X=the selling price

(60,000 units sold)*(X $ per unit) - ($115,000 fixed costs) - (60,000 units sold)*(.1X selling costs) - (60,000 units sold)*($4 unit variable cost)= $50,000 target profit.

Solve for X.

60,000X - 115,000 - 6,000X - 240,000 = 55,000
54,000X = 405,000
X= $7.5