The selling price per box for Cynthia's Cookies is $19.81. Fixedcosts are $60,000 and the variable cost per box is $9.82.Cynthia's Cookies must decide between two improvementoptions. Option 1 is spending $8,000 on a new onlinemarketing campaign that is expected to increase last year'ssales (units) by 25 percent. Option 2 is to reduce variablecosts by 10 percent by spending $8,000 on equipment andprocess improvements. For Option 2, sales remain at 8,600boxes. (The assumption here is that each option is equallycostly to implement.) What option provides the higher profits?Round your answers to the nearest cent.Net profit from Option 1: $Net profit from Option 2: $-Select- ✓ provides the higher profits.

Selling price = $19.81Fixed price = $60,000Variable cost per box = $9.82Increase in sales for Option…

Answered: The selling price per box for Cynthia's…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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