Fresh to Go makes a variety of delicious and healthy smoothies. It's most popular drinks contain an imported pomegranate julce and Fresh to Go can only import 64,000 ouncesof the juice per month. The juice is used to make 3 different types of smoathies:Pure Pom Cherry Pom Pom PunchSelling priceVariable costContribution margin$13.00$9.00$4.00$a.00$5.00$3.00$6.00$3.50$2.50Ounces of pomegranate juice used41Assume there is unlimited demand for the smoothles and Fresh to Go wants to maximize sales of its smoothie with the highest contribution margin per ounce. Normally, thecompany pays S0.30 per ounce for pomegranate juice up to 64,000 ounces. If the company can obtain additional ounces above the 64,000, what is the maximum price it wouldbe willing to pay per ounce?$1.10$4.30$2.80$0.00

The Question has given the variable cost of each of the smoothie. The variable costs include : 1.…

T maiyYthe company pays $0.30 per ounce for pomegranate juice up to 64,000 ounces. If the company can obtain additional ounces above the 64.000, what is the maximum price it would be willing to pay per ounce?

T maiyYthe company pays $0.30 per ounce for pomegranate juice up to 64,000 ounces. If the company can obtain additional ounces above the 64.000, what is the maximum price it would be willing to pay per ounce?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Fresh to Go makes a variety of delicious and healthy smoothies. It's most popular drinks contain an imported pomegranate julce and Fresh to Go can only import 64,000 ounces
of the juice per month. The juice is used to make 3 different types of smoathies:
Pure Pom Cherry Pom Pom Punch
Selling price
Variable cost
Contribution margin
$13.00
$9.00
$4.00
$a.00
$5.00
$3.00
$6.00
$3.50
$2.50
Ounces of pomegranate juice used
4
1
Assume there is unlimited demand for the smoothles and Fresh to Go wants to maximize sales of its smoothie with the highest contribution margin per ounce. Normally, the
company pays S0.30 per ounce for pomegranate juice up to 64,000 ounces. If the company can obtain additional ounces above the 64,000, what is the maximum price it would
be willing to pay per ounce?
$1.10
$4.30
$2.80
$0.00

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