Sunset Orchards is reviewing the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs...
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Accounting
Sunset Orchards is reviewing the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs per container are $1.50. Management is evaluating prices between $2.50 and $3.00. Determine the optimal price to maximize contribution margin and prepare the owner's equity statement.
Price per Half Gallon | Estimated Demand (Half-Gallon Units) |
$2.50 | 100,000 |
$2.55 | 97,500 |
$2.60 | 95,000 |
$2.65 | 92,500 |
$2.70 | 90,000 |
$2.75 | 87,500 |
$2.80 | 85,000 |
$2.85 | 82,500 |
$2.90 | 80,000 |
$2.95 | 77,500 |
$3.00 | 75,000 |
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