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    The Accountants at French Perfumery Decided To Increase The Price

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    Taimur Technologist
    The accountants at French Perfumery decided to increase the price of the scent Breezy by 10% from $6 to $6.60. They expect unit sales to decrease by 20% from 200,000 bottles to 160,000 bottles. With variable costs of $800,000, the pretax profit effect of the price increase is estimated to be an increase of $16,000 assuming no other changes. However, the accountants cannot be certain sales will decrease exactly 20%, introducing uncertainty that should factor into the managers' pricing decision.

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    The Accountants at French Perfumery Decided To Increase The Price

    Uploaded by

    Taimur Technologist
    27 views1 page
    The accountants at French Perfumery decided to increase the price of the scent Breezy by 10% from $6 to $6.60. They expect unit sales to decrease by 20% from 200,000 bottles to 160,000 bottles. With variable costs of $800,000, the pretax profit effect of the price increase is estimated to be an increase of $16,000 assuming no other changes. However, the accountants cannot be certain sales will decrease exactly 20%, introducing uncertainty that should factor into the managers' pricing decision.

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    The Accountants at French Perfumery Decided to Increase the Price

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    The accountants at French Perfumery decided to increase the price of the scent Breezy by 10% from $6 to $6.60. They expect unit sales to decrease by 20% from 200,000 bottles to 160,000 bottles. With variable costs of $800,000, the pretax profit effect of the price increase is estimated to be an increase of $16,000 assuming no other changes. However, the accountants cannot be certain sales will decrease exactly 20%, introducing uncertainty that should factor into the managers' pricing decision.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views1 page

    The Accountants at French Perfumery Decided To Increase The Price

    Uploaded by

    Taimur Technologist
    The accountants at French Perfumery decided to increase the price of the scent Breezy by 10% from $6 to $6.60. They expect unit sales to decrease by 20% from 200,000 bottles to 160,000 bottles. With variable costs of $800,000, the pretax profit effect of the price increase is estimated to be an increase of $16,000 assuming no other changes. However, the accountants cannot be certain sales will decrease exactly 20%, introducing uncertainty that should factor into the managers' pricing decision.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    The accountants at French Perfumery decided to increase

    the price #4534

    The accountants at French Perfumery decided to increase the price of a scent called Breezy by
    10%, from $6.00 per bottle to $6.60. French’s accountants expect the 10% price increase to
    reduce unit sales by 20%. Current sales are 200,000 bottles, and total variable costs are
    $800,000.

    REQUIRED
    A. Estimate the pretax profit effect of the price change, assuming no effect on the variable cost
    rate, on total fixed costs, or on sales of other products.
    B. How certain can the accountant be that volume will decline 20% if the selling price increases
    to $6.60? What effect does this uncertainty have on the managers’ decision to increase the
    selling price?

    The accountants at French Perfumery decided to increase the price

    ANSWER
    http://paperinstant.com/downloads/the-accountants-at-french-perfumery-decided-to-increase-
    the-price/

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