A leading beverage company sells its signature soft drink brand in vending machines for $0.97 per 12 oz. can. A vending machine has monthly costs of space rental, energy consumption, and capital depreciation of $134. A shortage in the world sugar market causes sugar prices to soar. As a result, the Variable Costs of a can of soda increases from $.32 to $0.42
What would the new selling price of the soda need to be in order to achieve a 20% increase in the contribution per unit after the increase in the price of sugar?