Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fruit Sushi Inc. produces 1000 packages of fruit sushi per month. The sales price is $5 per pack. Variable cost is $1.60 per unit, and

image text in transcribed
Fruit Sushi Inc. produces 1000 packages of fruit sushi per month. The sales price is $5 per pack. Variable cost is $1.60 per unit, and fixed costs are $1800 per month. Management is considering adding a chocolate coating to improve the value of the product by making it a dessert item. The variable cost will increase from $1.60 to $1.90 per unit, and fixed costs will increase by 10%. The CEO wants to price the new product at a level that will bring operating income up to $3000 per month. What sales price should be charged? (Round your answer to the nearest cent.) $6.88 $5.00 $3.10 $3.40

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

Financial Accounting

Authors: Robert Libby, Patricia Libby, Daniel G. Short

3rd Edition

0072458836, 978-0072458831

More Books

Students also viewed these Accounting questions