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.
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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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac69951b-8728-46ae-8bfb-4f439eaff53e%2F8e0ec400-04e1-4910-9b00-615bc7b11a1a%2Fbls9tno_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
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