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E4.6 (LO 2), AP The following selling price and cost information is associated with online retailer Tea Company's hottest selling mug, The Warmer: Selling price
E4.6 (LO 2), AP The following selling price and cost information is associated with online retailer Tea Company's hottest selling mug, The Warmer: Selling price per unit Product cost per unit Marketing costs per month Administrative costs per month Other fixed costs per month Shipping cost per unit (currently paid by Tea Company) Sales volume of mugs per month Each scenario below is independent of the others. Required $18 $8 $100 $190 $220 $3 100 a. How much monthly operating income does Tea Company currently earn? b. How much operating income would it earn if the company's marketing costs increased to $250 per month, its volume increased to 110 mugs per month, and its shipping cost went down to $2 per unit? c. 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)? d. 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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