Answer :
The correct answer is (D)42.5$
First, we have to calculate the total break even sales produced, by adding total fixed costs and variable costs.
Break even sales = $50000+ $35000
=85,000$
Now. We calculate selling price per unit by the formula,
Selling price per unit = Total break even sales /no. of units at break even point.
Selling price per unit= 85000/2000
Selling price per unit is 42.5$
Thus, the selling price was calculated and found to be 42.5$.
The break-even point refers to the point at which total cost and total revenue are equal. This can be a helpful tool for existing firms in examining costs and estimating earnings they’ll earn at various sales volumes, as well as to demonstrate their ability for recovery in the event of destructive scenarios.
Many investors want to know when the return may expected on their investment. This is due to the fact that some businesses may take years before becoming profitable, frequently losing money in the initial months or years before achieving break-even. Break-even point is crucial in any company plan given to a potential investor because of this.
To learn more about break even point, refer this link.
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