Gray Fullbuster Inc. manufactures Ice Cube Trays. One of the managers is considering raising the current...

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Gray Fullbuster Inc. manufactures Ice Cube Trays. One of the managers is considering raising the current price of ice cube trays $35 per unit by 10%. If this price increase goes through, it is estimated that demand will decrease by 20,000 units per month. Gray currently sells 51,700 units per month, each of which costs $24 in variable costs. Fixed costs are $197,000. Required: a. What is the current profit? b. What is the current break-even point in units? c. If the manager raises the price, what will profit be? d. If the manager raises the price, what will be the new break-even point in units? e. Assume the manager does not know how much demand will drop if the price increases. By how much would demand have to drop before the manager would not want to implement the price increase? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E What is the current profit? Current Profit < Required A Required B > Gray Fullbuster Inc. manufactures Ice Cube Trays. One of the managers is considering raising the current price of ice cube trays $35 per unit by 10%. If this price increase goes through, it is estimated that demand will decrease by 20,000 units per month. Gray currently sells 51,700 units per month, each of which costs $24 in variable costs. Fixed costs are $197,000. Required: a. What is the current profit? b. What is the current break-even point in units? c. If the manager raises the price, what will profit be? d. If the manager raises the price, what will be the new break-even point in units? e. Assume the manager does not know how much demand will drop if the price increases. By how much would demand have to drop before the manager would not want to implement the price increase? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E What is the current profit? Current Profit < Required A Required B >

Answer rating: 100% (QA)

To calculate the current profit we need to consider the revenue variable costs and fixed costs Given ... View the full answer