Calculate the price for the new product wills the two alternatives (sell as is or process further) produce the same operating income from the following data?

Company produces 1,000 packs of chicken feed per month. Sales price is $4 per pack. Variable cost is $1.50 per unit, and fixed costs are $1,800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will go up from $1.50 to $1.90 per unit, and fixed costs will go up by 20%.

Answer rating: 100% (QA)

Sell as is further process Variable ... View the full answer