The Dairy Division of Waterway Industries produces and sells 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 (170000) 

gallons $986000 

Variable costs 289000 

Contribution margin 697000 

Fixed costs 187000 

Net Income $ 510000 

Assume the Yogurt Division wants to purchase 20000 gallons of milk from the Dairy Division. The minimum price that will increase the Dairy Division’s profit is?

Answer rating: 100% (QA)

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