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Data:
Health Spring Water company Sells: bottles a day at a price: per unit.
Sales Revenue per day:
Total Variable Cost: VC = 16000.
Variable Cost per unit: V = 16000/2000 = $8
Fixed Cost: FC = 20000
Contribution Margin: .
Contribution per day:
Profit:
Question #1
The Company raises the price by 20% (with no change in its fixed cost). The new price is .
We would like to find the maximal loss in sales that leaves the company at the same profit level (iso-contribution).
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