Ch 10 Homework Problem B (pricing) Pick-Me-Up Company is introducing a new coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product follows: Price One-pound units $5 80,000 6 72,000 56,000 8 48,000 9 36,000 10 30,000 Estimated costs follow: Variable manufacturing costs $2 per unit .Fixed manufacturing costs $40,000 per year Variable selling and administrative costs S1 per unit Fixed selling and administrative costs $20,000 per year a. Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price. b. Which price do you recommend to the management of Pick-Me-Up? Explain your answer. Problem C (special offer) Ocean View Company operates tour boats. Its predicted operations for the year are as follows: Sales (1,000 tours per year) $400,000 Costs: Variable S250 per tour Fixed $100,000 per year The company has received a request to offer 100 tours for $300 each. Ocean View has plenty of capacity to do these tours in addition to its regular business. Doing these tours would not affect the company's regular sales or its fixed costs. a. Should the company do the special tours for $300 per tour? b. What is the effect of the decision on the company's operating profit