Evergreen Orchards is reexamining the pricing of its fresh-squeezed pineapple juice in half-gallon containers. Variable costs...
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Accounting
Evergreen Orchards is reexamining the pricing of its fresh-squeezed pineapple juice in half-gallon containers. Variable costs per container are $1.50. The management has determined the price range to be between $2.50 and $3.00. Considering only prices in increments of 5 cents, which price should Evergreen choose to maximize its contribution margin from sales? Prepare the retained earnings statement based on this decision.
Price per Half Gallon
Estimated Demand (Half-Gallon Units)
$2.50
100,000
$2.55
97,000
$2.60
94,000
$2.65
91,000
$2.70
88,000
$2.75
85,000
$2.80
82,000
$2.85
79,000
$2.90
76,000
$2.95
73,000
$3.00
70,000
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