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Question;The Dairy Division of Famous Foods, Inc. produces and sells milk to outside customers. The operation has the capacity to produce 200,000 gallons of milk a year. Last year?s operating results were as follows;Sales (160,000) gallons $500,000;Variable costs;312,000;Contribution margin 188,000;Fixed costs;100,000;Net Income;$88,000;Assume the Yogurt Division wants to purchase 30,000 gallons of milk from the Dairy Division. The minimum price that will increase the Dairy Division?s profit is;$1.18 per gallon.;$2.50 per gallon.;$1.95 per gallon.;$0.55 per gallon.


Paper#45560 | Written in 18-Jul-2015

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