Question
Softstep Stables has developed a lighter horseshoe for thoroughbreds, called the Air Citation. The company is presently experiencing labor difficulties and plans to raise wages
Softstep Stables has developed a lighter horseshoe for thoroughbreds, called the Air Citation. The company is presently experiencing labor difficulties and plans to raise wages to avert a strike. This will increase the Variable Cost per shoe from $15 to $22. The shoes presently sell for $55 each, but due to the competitive environment, Softstep Stables plans to drop their price to $31 each. Their current volume is 1,000 units. Fixed costs are $1,600. By what percentage must the unit volume increase in order to generate the same total contribution as is currently earned? newvol = 4,444 newucont = $9 tcont = 40,000 olducont = $40
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