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A company produces 1,000 packages of dog treats per month. The sales price is $6.00 per pack. Variable cost is $1.50 per unit, and fixed
A company produces 1,000 packages of dog treats per month. The sales price is $6.00 per pack. Variable cost is $1.50 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 $1.50 to $1.70 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.) A. $3.74 B. $6.00 C. $6.54 D. $2.80
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