Question

A leading beverage company sells its signature soft drink brand in vending machines for $0.99 per 12 oz. can. A vending machine has monthly fixed costs of space rental, energy consumption, and capital depreciation of $135. Variable cost for a can of soda is $0.43.

Answer 1

Answer:

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Explanation:

• Contribution per unit = Price - Variable cost = 0.99 - 0.43 = 0.56
• Contribution per unit required=0.56 * (1+20%)=0.672
• New selling price required=Contribution+Variable cost=0.672+0.42=$1.092