On a chilly Saturday morning, Roy Parker bought 30 dozen doughnuts for $72, took 10 gallons of
Question:
On a chilly Saturday morning, Roy Parker bought 30 dozen doughnuts for $72, took 10 gallons of hot coffee, and went to a farm auction. He sold all the coffee and all but 6 dozen of the doughnuts before heading for home late in the afternoon. Knowing that he could not eat 6 dozen donuts himself and that they would be worthless by the next day, he began to consider how he might sell the remaining doughnuts. Only one possibil- ity occurred to him. If he drove across town and left the doughnuts in the lunchroom at the plant where he worked, he was sure that workers on the late shift would be happy to buy the doughnuts. He figured the 20-mile round trip to the plant would cost him about $0.25 per mile. It would take him about an hour to make the trip, and he decided that it would be worthwhile to drive to the plant if he were compensated $10 for his time. Roy believes that workers will “forget” to pay for | dozen of the doughnuts.
Required: Prepare an analysis to determine how much Roy would have to charge per doughnut on the doughnuts he sells at the plant to reach his profit goal. TYK-1
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780030224294
1st Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley