Fruit Computer Company makes a fruit themed computer. Variable costs are $200 per unit, and fixed costs are $32,000 per month. Fruit Computer Company sells 500 units per month at a sales price of $300. The company believes that it can increase the price if the computer quality is upgraded. If so, the variable cost will increase to $240 per unit, and the fixed costs will rise by 50%. The CEO wishes to increase the company's operating income by 25%. Which sales price level would give the desired results? (Round your answer to the nearest cent.)
Fruit Computer Company makes a fruit themed computer. Variable costs are $200 per unit, and fixed costs are $32,000 per month. Fruit Computer Company sells 500 units per month at a sales price of $300. The company believes that it can increase the price if the computer quality is upgraded. If so, the variable cost will increase to $240 per unit, and the fixed costs will rise by 50%. The CEO wishes to increase the company's operating income by 25%. Which sales price level would give the desired results? (Round your answer to the nearest cent.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11E
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![Fruit Computer Company makes a fruit themed computer. Variable costs are $200 per unit, and
fixed costs are $32,000 per month. Fruit Computer Company sells 500 units per month at a sales
price of $300. The company believes that it can increase the price if the computer quality is
upgraded. If so, the variable cost will increase to $240 per unit, and the fixed costs will rise by 50%.
The CEO wishes to increase the company's operating income by 25%. Which sales price level
would give the desired results? (Round your answer to the nearest cent.)
$336.00 per unit
$1020.00 per unit
$381.00 per unit
$264.00 per unit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F13283715-3cd5-4f86-94d3-0801037d0ebb%2F4ddefbf2-b35c-4233-95ee-625d7d17f6bd%2F8k1j3n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Fruit Computer Company makes a fruit themed computer. Variable costs are $200 per unit, and
fixed costs are $32,000 per month. Fruit Computer Company sells 500 units per month at a sales
price of $300. The company believes that it can increase the price if the computer quality is
upgraded. If so, the variable cost will increase to $240 per unit, and the fixed costs will rise by 50%.
The CEO wishes to increase the company's operating income by 25%. Which sales price level
would give the desired results? (Round your answer to the nearest cent.)
$336.00 per unit
$1020.00 per unit
$381.00 per unit
$264.00 per unit
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