Elmwood, Inc. currently sells 13,400 units of its product per year for $114 each. Variable costs total $89 per unit. Elmwood's manager believes that if a new machine is leased for $257,950 per year, modifications can be made to the product that will increase its retail value. These modifications will increase variable costs by $13.00 per unit, but Elmwood is hoping to sell the modified units for $144 each. What is the least Elmwood could charge for the modified units to make it worthwhile to modify them? Round your answer to 2 decimal places.
Elmwood, Inc. currently sells 13,400 units of its product per year for $114 each. Variable costs total $89 per unit. Elmwood's manager believes that if a new machine is leased for $257,950 per year, modifications can be made to the product that will increase its retail value. These modifications will increase variable costs by $13.00 per unit, but Elmwood is hoping to sell the modified units for $144 each. What is the least Elmwood could charge for the modified units to make it worthwhile to modify them? Round your answer to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Elmwood, Inc. currently sells 13,400 units of its product per year for
$114 each. Variable costs total $89 per unit. Elmwood's manager
believes that if a new machine is leased for $257,950 per year,
modifications can be made to the product that will increase its retail
value. These modifications will increase variable costs by $13.00 per
unit, but Elmwood is hoping to sell the modified units for $144 each.
What is the least Elmwood could charge for the modified units to
make it worthwhile to modify them? Round your answer to 2
decimal places.
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