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The Non-dairy Division of Sunland Company produces and sells almond milk to outside customers. The operation has the capacity to produce 200000 gallons of
The Non-dairy Division of Sunland Company produces and sells almond milk to outside customers. The operation has the capacity to produce 200000 gallons of milk a year. Last year's operating results were as follows: Sales (150000) gallons $630000 Variable costs 322000 Contribution margin 308000 Fixed costs Net Income 100000 $208000 Assume the Non-dairy Division is operating at capacity. If the Dessert Division wants to purchase 30000 gallons of milk from the Non- dairy Division, what is the minimum price that will allow the Non-dairy Division to maintain its current net income? $2.15 per gallon $1.39 per gallon $4.20 per gallon O $2.05 per gallon
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