question 5

Gushers Company produces 1000 packages of fruit snacks per month. The sales price is $5 per pack. Variable cost is $1.50 per unit, and fixed costs are $1800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.80 per unit, and fixed costs will increase by 20%. At what sales price for the new product will the two alternatives (sell as is or process further) produce the same operating income? (Round your answer to the nearest cent) $5.00 $5.66 $3.96 O $1.70