Last month Annie's Homemade sold 5,000 servings of ice cream for $5.00 each. Its variable cost is $1.25 per serving and its total fixed costs were $11,000. Required: Calculate the change in next month's profit if: Unit sales increase from 5,000 to 5,200 and all else holds constant. The selling price per unit increases from $5.00 to $5.50, unit sales decrease by 6%, and all else holds constant. The variable cost per serving decreases from $1.25 to $1.15 and all else holds constant. The fixed costs increase by $2,000, unit sales increase by 8%, and all else holds constant.

Last month Annie's Homemade sold 5,000 servings of ice cream for $5.00 each. Its variable cost is $1.25 per serving and its total fixed costs were $11,000. Required: Calculate the change in next month's profit if: Unit sales increase from 5,000 to 5,200 and all else holds constant. The selling price per unit increases from $5.00 to $5.50, unit sales decrease by 6%, and all else holds constant. The variable cost per serving decreases from $1.25 to $1.15 and all else holds constant. The fixed costs increase by $2,000, unit sales increase by 8%, and all else holds constant.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

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