(Answered) Natural juices ltd has two divisions production and bottler

Accounting

Natural Juices Ltd has two divisions, Production and Bottler. The company sells natural juices in bottles of 1 litre. Each division's costs are provided below:

Juice production: Variable costs per litre $0.27

Fixed costs per litre $0.4

Bottler: Variable costs per bottle $0.1

Fixed costs per bottle $0.19

The Production and Bottler divisions have been operating at capacity of 1,624,643 litres of juice and 3,113,010 bottles of juice per week respectively. The CEO of the company decided the total litres of juice produced by Production Division have to be transferred to the Bottler Division at 237% of variable costs. The additional litres of juice can be purchased from other suppliers at $0.92 per litre.

Assuming the total production capacity of bottles of juice can be sold at a price of $2.03. What is the operating income per bottle of the Bottler Division (rounded using two decimals)?

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