A leading beverage company sells its signature soft drink brand in vending machines for $0.89 per 12 oz. can. A vending machine has monthly costs of space rental, energy consumption, and capital depreciation of $155. A shortage in the world sugar market causes sugar prices to soar. As a result, the Variable Cost of a can of soda increases from $.32 to $0.47. What would the new selling price of the soda need to be in order to achieve a 20% increase in the contribution per unit after the increase in the price of sugar? $0.97 $1.40 $1.13 $0.90
A leading beverage company sells its signature soft drink brand in vending machines for $0.89 per 12 oz. can. A vending machine has monthly costs of space rental, energy consumption, and capital depreciation of $155. A shortage in the world sugar market causes sugar prices to soar. As a result, the Variable Cost of a can of soda increases from $.32 to $0.47. What would the new selling price of the soda need to be in order to achieve a 20% increase in the contribution per unit after the increase in the price of sugar? $0.97 $1.40 $1.13 $0.90
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A leading beverage company sells its signature soft drink brand in vending machines for $0.89 per
12 oz. can. A vending machine has monthly costs of space rental, energy consumption, and capital
depreciation of $155. A shortage in the world sugar market causes sugar prices to soar. As a result,
the Variable Cost of a can of soda increases from $.32 to $0.47.
What would the new selling price of the soda need to be in order to achieve a 20% increase in the
contribution per unit after the increase in the price of sugar?
$0.97
$1.40
$1.13
$0.90
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