Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A manufacturer of concentrated liquid detergent sells 60% of its product in consumer markets and the rest in institutional markets. Its institutional buyers pay a

A manufacturer of concentrated liquid detergent sells 60% of its product in consumer markets and the rest in institutional markets. Its institutional buyers pay a price of $12 per gallon which is 75% of the price paid by its consumer buyers. Additional information available about the company is as below:

Variable cost = 8 $/Gallon, Fixed cost = 40,000 $/month. Presently, the company makes a profit of 12,500 $/m.

If the company is considering offering a 10% price reduction as a promotion to all buyers, how much additional sales in Gallons per month must it achieve so that its present profit level is maintained?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Working Capital Management

Authors: James Sagner

1st Edition

047087998X,0470916923

More Books

Students also viewed these Finance questions

Question

What are the classifications of Bank?

Answered: 1 week ago