Marlow Company makes bulk quantities of cleaning fluids.They currently sell 1 300 containers a month at a price of $24 per unit.If they add a new scent,they could charge $28 per unit for the improved product.It would cost them a total of $900 per month to make that alteration.If they decide to process further,it will improve their operating profit.

Question

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If Marlow Company adds a new scent, they can charge $4 more per unit. Selling 1,300 units at this increased price generates an additional $5,200 in revenue. After subtracting the $900 cost for the alteration, the net increase in profit is $4,300, thus improving their operating profit.

Marlow Company Makes Bulk Quantities of Cleaning Fluids