Author Question: Toy City Inc., manufactures a product and is considering raising the price by $40 a unit for the ... (Read 63 times)

2125004343 · **on:** Mar 6, 2021

Toy City Inc., manufactures a product and is considering raising the price by $40 a unit for the coming year. With a $40 price increase, demand is expected to fall by 2800 units.

Currently

Projected

Demand

23,000 units

20,200 units

Selling price

$160

$200

Variable costs per unit

$100

Bright Inc., has a capacity to produce 28,800 units. Due to an increase in the electricity costs, there is a sudden spike in demand by 2800 units. If the company adopts peak-load pricing policy and charges a premium of 20% over the current sales price, what is the total contribution on the sale of additional units?
◦ $257,600
◦ $280,000
◦ $537,600
◦ $526,400

juwms · **Reply #1 on:** Mar 6, 2021

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