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Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $ 4.50 per unit. At the lower price, the company expects to sell 47,000 units per year. What total contribution

Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $ 4.50 per unit. At the lower price, the company expects to sell 47,000 units per year. What total contribution

FINANCIAL ACCOUNTING
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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Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $ 4.50 per unit. At the lower price, the company expects to sell 47,000 units per year. What total contribution margin will the company earn if it sells 47,000 units at a price of $4.50 per unit? A. $67, 600 B. $61,100 C. $79,900 D. $70, 500
Transcribed Image Text:Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $ 4.50 per unit. At the lower price, the company expects to sell 47,000 units per year. What total contribution margin will the company earn if it sells 47,000 units at a price of $4.50 per unit? A. $67, 600 B. $61,100 C. $79,900 D. $70, 500
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