A leading beverage company sells its signature soft drink brand in vending machines for $0.89 per 12 oz. can. A vending machine has monthly costs of space rental, energy consumption, and capital depreciation of $155. A shortage in the world sugar market causes sugar prices to soar. As a result, the Variable Cost of a can of soda increases from $.32 to $0.47.

What would the new selling price of the soda need to be in order to achieve a 20% increase in the contribution per unit after the increase in the price of sugar?

 

Answer rating: 100% (QA)

SOLUTION To solve this problem we need to calculate the contribution per unit CPU before and after t... View the full answer