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In 2010, P&G slashed prices on many of its products. The price cuts come at a cost, however, and sales must increase considerably just to
In 2010, P&G slashed prices on many of its products. The price cuts come at a cost, however, and sales must increase considerably just to break even. P&G's average contribution margin before the price cuts was 20 percent. Calculate the new contribution margin (Price - VC) if prices are reduced by 10 percent. (Hint: Assume the price = $1.00 and work the problem.)
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