Marshall's grocery store has a small bakery that sells a variety of baked goods. The manager of

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Marshall's grocery store has a small bakery that sells a variety of baked goods. The manager of the bakery responsibility center has decided to sell a cup of coffee and doughnut combo at the low price of $\$ 1.25$, as a means of attracting customers. The incremental cost of labor per combo sale has been calculated as $\$ .80$, the variable cost of the doughnut is $\$ .27$, and the variable cost of the coffee (including cup) is $\$ .22$. What is the contribution margin for the combo? How does the manager think the combo will affect the bakery's responsibility margin?

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