Do not give solution in image Pronghorn shucks and packs oysters and sells them on a wholesale basis to fine restaurants across the province. The incomestatement for last year follows:Revenue (2,000 cases)Expenses:Wages for pickers, shuckers, and packersPacking materialsRent and insurancePretax IncomeAdministration and selling(a)(b)$94,000Price per case22,000$26,000Pickers, shuckers, and packers are employed on an hourly basis and can be laid off whenever necessary. Salespeople merely deliverthe product and so are paid on a salaried basis.42,000Linda Hanson, manager of Pronghorn, believes that a price increase of 10% would result in a 15% decrease in sales.The Rake and Tongs Restaurant is providing dinner for a meeting of the Pickers, Shuckers, and Packers Union in Prince EdwardIsland. Rake and Tongs offered to pay Pronghorn $64 a case for 300 cases of oysters. This sale would not affect Pronghorn's regularsales.Minimum Price $$194,000184,000Ignoring the Rake and Tongs offer, estimate the profit-maximizing price for Pronghorn. (Round entry to whole amounts, eg. 5725.Round elasticity to 3 decimal places, e.g. 1.525 for your calculations.)$10,000Assuming that Linda is not willing to lose money on the Rake and Tongs order, what is the minimum price that she should acceptfor the special order?

Profit Maximization:It is the process by which the company can know the level of production needed…

(a) Ignoring the Rake and Tongs offer, estimate the profit-maximizing price for Pronghorn. (Round entry to whole amounts, eg. 5725. Round elasticity to 3 decimal places, e.g. 1.525 for your calculations.) Price per case $ (b) Mon Assuming that Linda is not willing to lose money on the Rake and Tongs order, what is the minimum price that she should accept for the special order? Minimum Price $

(a) Ignoring the Rake and Tongs offer, estimate the profit-maximizing price for Pronghorn. (Round entry to whole amounts, eg. 5725. Round elasticity to 3 decimal places, e.g. 1.525 for your calculations.) Price per case $ (b) Mon Assuming that Linda is not willing to lose money on the Rake and Tongs order, what is the minimum price that she should accept for the special order? Minimum Price $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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