A company produces 1000 packages of dog treats per month. The sales price is $6 per pack. Variable cost is $1.50 per unit, and fixed costs are $1700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.80 per unit, and fixed costs will increase by 10%. At what sales price for the new product will the two alternatives (sell as is or process further) produce the same operating income? (Round your answer to the nearest cent.)
A) $3.67
B) $6.47
C) $2.80
D) $6.00
B) $6.47
You might also like to view...
When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally are affected by:
A. Noncurrent liability and equity accounts. B. Net income, current assets, and current liabilities. C. Noncurrent assets. D. Both noncurrent assets and noncurrent liabilities. E. Equity accounts only.
Amy Hudson has been trying to purchase Glen Cappel's antique desk for some time, but Glen has been reluctant to sell. One evening Glen said to Amy, "Okay, I'll sell the desk for $550." Amy replied, "Thank you, Glen. I accept." The agreement was not reduced to writing, but Glen and Amy did shake hands. Two days later, Amy sent Glen a letter outlining the terms of the agreement, and stating that
she would deliver $550 cash according to the agreement within ten days. The letter was signed, "Best regards, Amy." Later, Amy had second thoughts, and refused to go through with the purchase. Nothing had been exchanged at this point. Glen a. can enforce the contract against Amy because the statute of frauds is satisfied under this situation. b. cannot enforce the contract against Amy because her signature was inadequate without her last name under the statute of frauds. c. cannot enforce the contract against Amy because he did not sign the letter. d. can enforce the contract because they shook hands on the agreement.
A stochastic model represents the system over a period of time
a. True b. False
Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer, which is the Form W-4.
Answer the following statement true (T) or false (F)