Last year, Dorothy sold 3,600 baskets, and she believes that demand this year will be stable at 3,600 baskets. The following are the actions Dorothy could take if she wants to earn $28,000 in operating income by selling only 3,600 baskets. Consider each action independently. (Round per unit answers to 2 decimal places, eg. 52.75 and fixed cost to 0 decimal places, eg. 5,275.) 1 2 3. Raise selling price per unit to Reduce variable costs per unit to Reduce fixed costs to $ $ $
Last year, Dorothy sold 3,600 baskets, and she believes that demand this year will be stable at 3,600 baskets. The following are the actions Dorothy could take if she wants to earn $28,000 in operating income by selling only 3,600 baskets. Consider each action independently. (Round per unit answers to 2 decimal places, eg. 52.75 and fixed cost to 0 decimal places, eg. 5,275.) 1 2 3. Raise selling price per unit to Reduce variable costs per unit to Reduce fixed costs to $ $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Last year, Dorothy sold 3,600 baskets, and she believes that demand this year will be stable at 3,600 baskets. The following are
the actions Dorothy could take if she wants to earn $28,000 in operating income by selling only 3,600 baskets. Consider each
action independently. (Round per unit answers to 2 decimal places, eg. 52.75 and fixed cost to 0 decimal places, eg. 5,275.)
1.
2
3.
Raise selling price per unit to
Reduce variable costs per unit to
Reduce fixed costs to
$
$
$

Transcribed Image Text:Three years ago, Dorothy Taylor started a business that creates and delivers holiday and birthday gift baskets to students at the local
university. Dorothy sells the baskets for $33 each, and her variable costs are $23 per basket. She incurs $11,600 in fixed costs each
year.
(a)
How many baskets will Dorothy have to sell this year if she wants to earn $28,000 in operating income? (Round answer to O decimal
places, eg. 5,275)
baskets
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