Raise selling price and reduce variable costs

Assignment Help Financial Accounting

Reference no: EM131261513

Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $27 each, and her variable costs are $17 per basket. She incurs $12,600 in fixed costs each year.

1. How many baskets will Marissa have to sell this year if she wants to earn $28,700 in operating income? __________ baskets

2. Last year, Marissa sold 4,010 baskets, and she beliees that demand this year will be stable at 4,010 baskets. The following are the same actions Marissa could take if she wants to earn $28,700 in operating income by selling only 4,010 baskets.

Please solve for:

Raise selling price to $_________

Reduce variable costs to $__________

Reduce fixed costs to $_____________

Reference no: EM131261513

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