#50)

47) Arlo Company makes bulk quantities of cleaning fluids. They currently sell 1,000 containers a 3 month at a price of $22 per unit. If they added a disinfectant, they could charge $25 per unit for the If so, improved product. It would cost them a total of $3,800 per month to make tteraton what would be the effect on operational income? eration. A) It would increase by $3,000. C) It would decline by $1,200. 2,000 B) It would decline by $800. D) It would increase by $400 48) Arlo Company makes bulk quantities of cleaning fluids. They currently sell 1,000 containers a month at a price of $22 per unit. If they added a newer scent, they could charge $22.75 per unit for 5x ,ooo the improved product. It would cost them a total of $700 per month to make that alteration. If so, what would be the effect on operational income? A) It would decline by $120. C) It would increase by $300. B) It would increase by $50. D) It would decline by $800. 49) When a company is considering the option of processing their product further to achieve higher sales revenues, they must consider all of the following factors EXCEPT: A) will the additional processing produce any environmental toxins? B) how much incremental revenue can be earned if processed further? C) how much additional costs are necessary to process D) how much cost is required to produce the basic product, before processing further? 50) A company produces 1,000 packs of chicken feed per month. Sales price is $4.00 per pack. Variable A cost is $1.50 per unit, and fixed costs are $1,800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will go up from $1.50 to $1.90 per unit, and fixed costs will go up by 20%. The CEO wishes to price the new product at a level which will bring operational income up to $1,000 per month. What price is needed? A) $5.06 B) $4.76 C) $4.99 D) $5.00 SP 4.00