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A company produces 1,000 packages of dog treats per month. The sales price is $4.00 per pack. Variable cost is $1.60 per unit, and fixed
A company produces 1,000 packages of dog treats per month. The sales price is $4.00 per pack. Variable cost is $1.60 per unit, and fixed costs are $1,700 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 $1.80 per unit, and fixed costs will increase by 20%. 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 A. $4.00 OB. $4.54 OC. $3.84 OD. $0.70 Regarding relevant nonfinancial information, which of the following statements is incorrect? O A. Qualitative factors can be ignored because these factors are difficult to measure. OB. Relevant qualitative information has the same characteristics as relevant financial information. OC. Managers must always consider the potential quantitative and qualitative effects of their decisions. OD. Nonfinancial, or qualitative, factors play a role in managers' decisions and, as a result, can be relevant. A company sells two products with information as follows: Sales price per unit Variable cost per unit $12 $10 $26 $12 The products are machine made. Four units of product A can be made with one machine hour, and two units of product B can be made with one machine hour. The company has a maximum of 3,000 machine hours available per month. Assume there are no constraints on sales of either product, and the company can choose any product mix they wish. What is the maximum amount of contribution margin that the company could earn in a month? O A. $72,000 B. $84,000 O c. $6,000 OD. $156,000
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