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Green Meadows is evaluating the pricing of its fresh-squeezed peach juice in half-gallon containers. Variable costs per container are $1.75. Management has determined that the
Green Meadows is evaluating the pricing of its fresh-squeezed peach juice in half-gallon containers. Variable costs per container are $1.75. Management has determined that the price per half-gallon should be between $2.75 and $3.25. Identify the price that maximizes contribution margin and prepare the profit and loss statement.
Price per Half Gallon | Estimated Demand (Half-Gallon Units) |
$2.75 | 97,000 |
$2.80 | 94,000 |
$2.85 | 91,000 |
$2.90 | 88,000 |
$2.95 | 85,000 |
$3.00 | 82,000 |
$3.05 | 79,000 |
$3.10 | 76,000 |
$3.15 | 73,000 |
$3.20 | 70,000 |
$3.25 | 67,000 |
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