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Question The Dairy Division of Famous Foods Inc. produces and sells milk to outside customers. The operation has the capacity to produce 200000 gallons of milk a year. Last year?s operating results were as follows: Sales (160000) gallons $500000 Variable costs 312000 Contribution margin 188000 Fixed costs 100000 Net Income $88000 Assume the Yogurt Division wants to purchase 30000 gallons of milk from the Dairy Division. The minimum price that will increase the Dairy Division?s profit is $1.18 per gallon. $2.50 per gallon. $1.95 per gallon. $0.55 per gallon.

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