Fixed costs for the production and marketing

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Reference no: EM13137411

Flower Mills makes Wheaties and many other food products.

Suppose the product manager of a new Flower Mills cereal has determined that the appropriate wholesale price for a carton of the new cereal is $48. The fixed costs for the production and marketing of the new product are $15million.

The production manager estimates that she can sell 800,000 cartons at the $48 price.

What is the largest variable cost per carton that can be paid and still achieve a profit of $1million.

Reference no: EM13137411

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