Visa operates Visa's Cookies and is experimenting with pricing for a four-pack of cookies she buys and resells to convenience stores. She has tracked how many people buy the cookies in a month at various price levels in order to determine the optimal pricing. Monthly sales volume, costs and possible pricing amounts are provided here. Monthly sales volume, price, and costs All Scenarios Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6 Scenario 7 Quantity 200 175 150 125 100 75 50 Selling price $5.00 $7.50 $10.00 $12.50 $15.00 $17.50 $20.00 Product cost $3.25 per unit Commissions 0.25 per unit Admin costs 400.00 per month Instructions There are three parts to this problem. Use Excel to perform the following. a. Prepare comparative traditional income statements for each of the seven scenarios. Use conditional formatting to flag the lowest and highest operating income. b. Discuss the behavior of the income statement components. Explain why the maximum operating profit level does not occur at the maximum units sold. c. Scenario 3 and Scenario 5 both generated the same revenue. Explain why the operating incomes for these scenarios differ?

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a Comparative Traditional Income Statements Heres an example of how you can set up the comparative t... View the full answer