Flower Mills makes Wheaties and many other food products.
Suppose the product manager of a new Flower Mills cereal has determined that the appropriate wholesale price for a carton of the new cereal is $48. The fixed costs for the production and marketing of the new product are $15million. The production manager estimates that she can sell 800,000 cartons at the $48 price. What is the largest variable cost per carton that can be paid and still achieve a profit of $1million.