Question

Carlos Naturals manufactures bulk quantities of cleaning fluids. The company currently sells 700 containers a month at a sales price of​ $24 per unit. The addition of a new disinfectant will result in a sales price of​ $26 per unit for the improved product. It would cost a total of​ $4,000 per month to make the alteration. Operating income would​ ________.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The company currently sells 700 containers a month at a sales price of​ $24 per unit. The addition of a new disinfectant will result in a sales price of​ $26 per unit for the improved product. It would cost a total of​ $4,000 per month to alter.

First, we need to calculate the current sales level:

Sales= 700*24= $16,800

Now, we can calculate the new income:

Sales= 700*26 - 4,000= $14,200

It is more convenient to not apply the disinfectant.