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Dear John, Could you explain to me how do I get shakes (contract) contribution per unit $1.00 and how do I approach steps 3 optimum production plan?
Many thanks
Since the question says that Shakes will be sold to Encompass at a discount price of $5.80 which is 0.20 lower that the the normal price, then the contribution will be 0.20 lower as well at $1 instead of $1.20.
Step 3 is normal key factor analysis, which I go through in the first part of my free lecture on throughout accounting (and sorry – but I cannot possibly type out all of the my lectures here 🙂 )
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