Autumn Harvest is reconsidering the pricing of its fresh-squeezed pear juice in half-gallon containers. Variable costs...
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Autumn Harvest is reconsidering the pricing of its fresh-squeezed pear juice in half-gallon containers. Variable costs per container are $1.80. Management has set a price range between $2.80 and $3.30. Considering the estimated demand at different prices, determine the optimal price to maximize contribution margin and prepare the profit and loss statement.
Price per Half Gallon | Estimated Demand (Half-Gallon Units) |
$2.80 | 90,000 |
$2.85 | 87,000 |
$2.90 | 84,000 |
$2.95 | 81,000 |
$3.00 | 78,000 |
$3.05 | 75,000 |
$3.10 | 72,000 |
$3.15 | 69,000 |
$3.20 | 66,000 |
$3.25 | 63,000 |
$3.30 | 60,000 |
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