Question
A company produces 1 comma 0001,000 packages of dog treats per month. The sales price is...
A company produces
1 comma 0001,000
packages of dog treats per month. The sales price is
$ 6.00$6.00
per pack. Variable cost is
$ 1.50$1.50
per unit, and fixed costs are
$ 1 comma 800$1,800
per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from
$ 1.50$1.50
to
$ 1.80$1.80
per unit, and fixed costs will increase by
1010%.
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.
$ 6.48$6.48
B.
$ 3.78$3.78
C.
$ 2.70$2.70
D.
$ 6.00
Homework Answers
Answer #1
Answer : Option A $6.48
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