Answer:
Selling price = $0.89
Explanation:
Contribution per unit before price change = Selling price - variable cost = $0.72 - $0.32 = $0.40
A 20% increase in contribution is required. New contribution should be $0.4 + 20% of $0.4 = $0.48
Thus we have,
Contribution per unit = Selling price - variable cost
0.48 = selling price - 0.41
Selling price = $0.89
The new selling price of the soda need to be in order to achieve a 20% increase in the contribution per unit is $0.89.
Contribution per unit is defined as the remaining profit leave behind on the sale of a unit, after all variable expenses have been deducted from the incidental revenue.
This content is helpful for ascertaining the minimal achievable price at which to sell a product.
Computation of contribution per unit:
[tex]\text{Contribution Per Unit Before Price Change} = \text{Selling Price} - \text{Variable Cost}\\\\\text{Contribution Per Unit Before Price Change} = \$0.72 - \$0.32\\\\\text{Contribution Per Unit Before Price Change} = \$0.40[/tex]
As per the given, information 20% raise in contribution is needed. New contribution should be:
[tex]\text{Contribution Per Unit Before Price Change}+20\% \text{of} \text{Contribution Per Unit Before Price Change}\\\\\ = $0.4 + 20\%\ \text {of}\ \$0.4\\= $0.48[/tex]
Thus, we have,
[tex]\text{Contribution Per Unit} = \text{Selling Price - Variable Cost}\\\\0.48 = \text{Selling Price} - 0.41\\\\\text{Selling Price} = \$0.89[/tex]
Therefore, new selling price is $0.89.
To learn more about the contribution per unit, refer to:
https://brainly.com/question/26762552
