Answer (B) is correct . If the company wants a 20% return on sales, the $600,000 of costs represent 80% of the selling price. Dividing $600,000 by .8 results in a total selling price of $750,000, or $750 per unit.
Answer (A) is incorrect because This amount is based on a 20% return on costs.
Answer (C) is incorrect because This amount is based on an 80% return on costs.
Answer (D) is incorrect because This amount is based on an 80% return on sales.
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