Original Matcha Banana Total Sales revenue $55,000 $49,000 $36,000 $140,000 Less: Variable expenses ($17,000) ($25,000)...
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Original Matcha Banana Total Sales revenue $55,000 $49,000 $36,000 $140,000 Less: Variable expenses ($17,000) ($25,000) ($22,000) ($64,000) Contribution margin $38,000 $24,000 $14,000 $76,000 Less: direct fixed expenses: ($14.800) ($15.950) ($15.700) ($46.450) Segment margin $23,200 $8,050 ($1,700) $29,550 ($13.250) Less : Common fixed expenses Operating Income (loss) $16,300 Amanda Burch, as the financial manager of Suka Brand, is concerned about the financial performance and considering dropping the Banana Almond Milk flavor. After further investigation, she found out that the Banana Almond Milk flavor is using a low-quality Banana essence and not all of the customers have a positive feedback about this product. Required: 1. Amanda believes that by using a high-quality Banana essence with additional cost $2 for each bottle will have a positive feedback from customers, that all of the 1,250 bottles produced are sold and increase the sales revenue by 45%. Would Amanda still consider dropping the Banana Almond Milk Flavor
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