Bright inc manufactures table lamps and is considering, Ask an Expert

Finance

Bright Inc., manufactures table lamps and is considering raising the price by $50 a unit for the coming year. With a $50 price increase, demand is expected to fall by 2200 units.

Currently Projected

Demand 21,000 units 18,800 units

Selling price $160 $210

Variable costs per unit $120 $120

Bright Inc., has a capacity to produce 26,200 units. Due to an increase in the electricity costs, there is a sudden spike in demand by 2200 units. If the company adopts peak-load pricing policy and charges a premium of 20% over the current sales price, what is the total contribution on the sale of additional units?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92752310

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