Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ebro A company produces 1,000 packages of chicken food per month. The sales price is St per pack. Variable cost is $1.60 per unit, and

image text in transcribed
image text in transcribed
ebro A company produces 1,000 packages of chicken food per month. The sales price is St per pack. Variable cost is $1.60 per unit, and fixed costs are $1,800 per month Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $160 to $170 por unit, and fixed costs will increase by 10% The CEO wants to price the new product at a love that will bring operating income up to $1,000 per month What sales price should be charged? (Round your answer to the nearest cont.) O A $4.00 OB. $4.68 OC. $2.30 OD. $2.40 amen Assig 0 Febru Sales revenue Castillo Corporation has provided you with the following budgeted income statement for one of its products $700,000 Variable costs (430,000) Contribution margin $270,000 Fixed costs (320,000) Operating loss S(50,000) Castillo han just encountered environmental problems with the product and will be forced to drop the product line altogether. Castillo will be able to eliminate 75% of the Fixed costs What will be the impact on operating income of the company? OA. Operating income will decrease by $30,000 OB. Operating incomo will decrease by 240,000 OC Operating income will increase by $30,000, OD. Operating income will increase by $240,000 emen Assig Assige

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

Introduction to Corporate Finance What Companies Do

Authors: John Graham, Scott Smart

3rd edition

9781111532611, 1111222282, 1111532613, 978-1111222284

More Books

Students also viewed these Accounting questions