Pick-Me-Up Company is introducing a new high caffeine coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product is as follows:Price1 Lb. units demanded$4.5087,500$5.0075,500$5.5057,200$6.0047,800$6.5035,700$7.0026,300 Estimated costs are as follows:Variable manufacturing costs per unit$1.50Fixed manufacturing cost per year$40,900Variable selling & administrative costs per unit$0.50Fixed selling & administrative costs per year$21,600 Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price.At what price do you recommend Pick-Me-Up Company should choose. PriceDemandTotal RevenueVariable CostsFixed CostsTotal CostsTotal Profit (Loss)$4.50 $5.00 $5.50 $6.00 $6.50 $7.00

Variable cost includes costs that change based on the amount of output produced. Variable costs may…

Answered: Pick-Me-Up Company is introducing a new…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 40E

See similar textbooks

Related questions

Question

Pick-Me-Up Company is introducing a new high caffeine coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product is as follows:

Price	1 Lb. units demanded
$4.50	87,500
$5.00	75,500
$5.50	57,200
$6.00	47,800
$6.50	35,700
$7.00	26,300

Estimated costs are as follows:

Variable manufacturing costs per unit	$1.50
Fixed manufacturing cost per year	$40,900
Variable selling & administrative costs per unit	$0.50
Fixed selling & administrative costs per year	$21,600

Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price.

At what price do you recommend Pick-Me-Up Company should choose.