Rapunzel is a small business that currently sells a single product, shampoo, for $4 per bottle. The variable cost per bottle is $3. Rapunzel's fixed costs total $6000.

Calculate the following amounts for Rapunzel's business:

i contribution margin per bottle of shampoo

ii break-even point in bottles of shampoo

iii the profit that Rapunzel will earn at a sales volume of 25 000 bottles of shampoo iv the number of bottles of shampoo that Rapunzel must sell to earn a profit of $16 000.

b Rapunzel is considering increasing its total fixed cost to $8000 and then also increasing the selling price of its product to $5. The variable cost per bottle of shampoo would remain unchanged. Repeat the calculations from (a) using this new information. Will this decision be a good one for Rapunzel? Why or why not