Question
A company produces 1000 packages of chicken feed per month. The sales price is $5 per pack. Variable cost is $1.60 per unit, and fixed
A company produces 1000 packages of chicken feed 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%. The CEO wants to price the new product at a level that will bring operating income up to $2000 per month. What sales price should be charged? (Round your answer to the nearest cent.)
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