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Mountain Valley Orchards is reconsidering the pricing of its fresh-squeezed peach juice in half-gallon containers. Variable costs per container are $1.55. Based on market study,

Mountain Valley Orchards is reconsidering the pricing of its fresh-squeezed peach juice in half-gallon containers. Variable costs per container are $1.55. Based on market study, management has determined that the price per half-gallon should be between $2.55 and $3.05. Identify the price to maximize contribution margin and prepare a cash flow statement.

Price per Half Gallon

Estimated Demand (Half-Gallon Units)

$2.55

98,000

$2.60

95,000

$2.65

92,000

$2.70

89,000

$2.75

86,000

$2.80

83,000

$2.85

80,000

$2.90

77,000

$2.95

74,000

$3.00

71,000

$3.05

68,000

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