The accountants at French Perfumery have decided to increase the price of a scent ...
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Accounting
The accountants at French Perfumery have decided to increase the price of a scent
LOl, L called Breezy by from $ per bottle to $ French's accountants expect the price increase to reduce unit sales by Current sales are bottles, and total variable costs are $
A Estimate the pretax profit effect of the price change, assuming no effect on the variable cost rate, on total fixed costs, or on sales of other products. Hint: Calculate the contribution margin at the old and new pricesand volumes.
B How certain can the accountant be that volume wil l decl ine if the selling price increases to $ What effect does this uncertainty have on the managers' decision to increase the selling price?
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