Product Pricing: Two Products Assume Spindrift Beverage Co. manufactures two products, flavored water and carbonated water, both on the same assembly lines and packaged 30 cans per pack. The predicted sales are 150,000 packs of flavored water and 500,000 packs of carbonated water. The predicted costs for the year are as follows. Materials Other Variable Costs Fixed Costs $100,000 $600,000 250,000 900,000 Flavored water uses 25% of the materials costs and 10% of the other costs. Carbonated water uses 75% of the materials costs and 90% of the other costs. The management of Spindrift desires an annual profit of $450,000. (a) What price should Spindrift charge for each pack if management believes the carbonated water sells for 20 percent more than the price of flavored water? Round answers to the nearest cent. Flavored water $ Carbonated water $ (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. Flavored water $ Carbonated water $

Product Pricing: Two Products Assume Spindrift Beverage Co. manufactures two products, flavored water and carbonated water, both on the same assembly lines and packaged 30 cans per pack. The predicted sales are 150,000 packs of flavored water and 500,000 packs of carbonated water. The predicted costs for the year are as follows. Materials Other Variable Costs Fixed Costs $100,000 $600,000 250,000 900,000 Flavored water uses 25% of the materials costs and 10% of the other costs. Carbonated water uses 75% of the materials costs and 90% of the other costs. The management of Spindrift desires an annual profit of $450,000. (a) What price should Spindrift charge for each pack if management believes the carbonated water sells for 20 percent more than the price of flavored water? Round answers to the nearest cent. Flavored water $ Carbonated water $ (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. Flavored water $ Carbonated water $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PA: Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit...

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