Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.50 per unit, and fixed costs are $1700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.80 per unit, and fixed costs will increase by 20%. At what sales price for the new product will the two alternatives (sell as is or process further) produce the same operating income? (Round your answer to the nearest cent.) Group of answer choices $3.84 $5.00 $5.64 $1.80
Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.50 per unit, and fixed costs are $1700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.80 per unit, and fixed costs will increase by 20%. At what sales price for the new product will the two alternatives (sell as is or process further) produce the same operating income? (Round your answer to the nearest cent.) Group of answer choices $3.84 $5.00 $5.64 $1.80
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.50 per unit, and fixed costs are $1700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.80 per unit, and fixed costs will increase by 20%. At what sales price for the new product will the two alternatives (sell as is or process further) produce the same operating income? (Round your answer to the nearest cent.)
Group of answer choices
$3.84
$5.00
$5.64
$1.80
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