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E 4 . 6 ( LO 2 ) , AP The following selling price and cost information is associated with online retailer Tea Company s

E4.6(LO 2), AP The following selling price and cost information is associated with online retailer Tea Companys hottest selling mug, The Warmer.E4.6(LO2), AP The following selling price and cost information is associated with online retailer Tea Company's hottest selling mug, The Warmer.
\table[[Selling price per unit,$18
Selling price per unit
$18
Product cost per unit
$7
Marketing costs per month
$100
Administrative costs per month
$200
Other fixed costs per month
$200
Shipping cost per unit (currently paid by Tea Company)
$3
Sales volume of mugs per month
90
Each scenario below is independent of the others.
Required
How much monthly operating income does Tea Company currently earn?
How much operating income would it earn if the companys marketing costs increased to $250 per month, its volume increased to 100 mugs per month, and its shipping cost went down to $2 per unit?
How much operating income would it earn if it shifted the shipping cost to the customer, while lowering the selling price to $17(all else is the same as original)?
In which scenario does Tea Company generate the most income? What characteristics are present in this scenario that were not present in the other scenarios?
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