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to improve the 90 per unit, an : will the two al me? (Round yo

to improve the 90 per unit, an : will the two al me? (Round yo

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.60 per unit, and fixed costs are $1800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.60 to $1.90 per unit, and fixed costs will increase by 10%. 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.) O $5.48 O $5.00 O $3.88 O $1.60 < Previous Next ►
Transcribed Image Text:Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.60 per unit, and fixed costs are $1800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.60 to $1.90 per unit, and fixed costs will increase by 10%. 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.) O $5.48 O $5.00 O $3.88 O $1.60 < Previous Next ►
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