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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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