(ii) Division C is considering a decision to lower its selling price to customers external to the group to $95per kilogram. If implemented, this decision is expected to increase sales to external customers to70,000 kilograms.Required:For BOTH the current selling price of CC of $105 per kilogram and the proposed selling price of $95per kilogram, prepare a detailed analysis of revenue, costs and net profits of BAG.Note: in addition, comment on other considerations that should be taken into account before this sellingprice change is implemented. (6 marks)
(ii) Division C is considering a decision to lower its selling price to customers external to the group to $95
per kilogram. If implemented, this decision is expected to increase sales to external customers to
70,000 kilograms.
Required:
For BOTH the current selling price of CC of $105 per kilogram and the proposed selling price of $95
per kilogram, prepare a detailed analysis of revenue, costs and net profits of BAG.
Note: in addition, comment on other considerations that should be taken into account before this selling
price change is implemented. (6 marks)
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