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Splash Company sells bottled beverages. During the past year, 600,000 bottles were produced and sold at a price of $1.00 per bottle. Variable cost per

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Splash Company sells bottled beverages. During the past year, 600,000 bottles were produced and sold at a price of $1.00 per bottle. Variable cost per unit was $0.40 and total fixed costs were $200,000. Splash would like to raise the price per unit to $1.15, but feels that this will reduce sales to 575,000 bottles per year. REQUIRED: Perform the appropriate incremental analysis of this situation. Clearly label the incremental revenues, incremental costs, and incremental profits. Should Splash raise its price? Wilson Company makes of a board game called Smelly Rats. Demand is so high that Wilson is working at full production capacity. It is considering adding a second production shift to handle the excess demand. a. What additional costs is Wilson likely to have if it adds a production shift? b. What options does Wilson have to handle the increased demand without adding a production shift? What are the pros and cons of each of these alternatives

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