Sunset Orchards is reviewing the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs...
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Accounting
Sunset Orchards is reviewing the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs per container are $1.50. Management is evaluating prices between $2.50 and $3.00. Determine the optimal price to maximize contribution margin and prepare the owner's equity statement.
Price per Half Gallon
Estimated Demand (Half-Gallon Units)
$2.50
100,000
$2.55
97,500
$2.60
95,000
$2.65
92,500
$2.70
90,000
$2.75
87,500
$2.80
85,000
$2.85
82,500
$2.90
80,000
$2.95
77,500
$3.00
75,000
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