1.2 Cakes by Monica (a bakery under the umbrella of the Caf Brul restaurant) in Vermillion, SD,...

1.2 Cakes by Monica (a bakery under the umbrella of the Café Brulé restaurant) in Vermillion, SD, makes cupcakes for purchase from three different kinds of customers:

• Type 1: Customers who purchase cupcakes at their individual price in the store

• Type 2: Customers who order cupcakes at least 3 days in advance in increments of 1 dozen of each flavor; discount from the individual cupcake price: $0.25 per cupcake

• Type 3: Customers who order cupcakes at least 2 weeks in advance but order at least 4 dozen of each flavor; discount from the individual cupcake price: $0.50 per cupcake Cakes by Monica charges customers ordering more cupcakes of the same kind less per cupcake because there is less waste and less expense for larger orders placed further in advance, since she can order ingredients in bulk from a less expensive supplier.

Using the information provided, calculate the total revenue Cakes by Monica will receive from each type of customer and in total from the sale of cupcakes at each price. What do you notice about sales of cupcakes and total revenue as cupcake prices decline?

If Cakes by Monica wants to make as much revenue as possible but keep its current discount structure, how much should the bakery charge for its cupcakes? How much total revenue does the bakery make?
Is there another pricing and discount structure that would increase total revenue for Cakes by Monica? If so, what is the total revenue Cakes by Monica will receive?

Transcribed Image Text:

A B C 12345678UUP Individual Cupcake Price Type 1 Sales (individual) Type 3 Sales (in dozens) Type 2 Sales (in dozens) D Weekly Sales/Revenue Estimates G H Type 1 TR Type 2 TR Type 3 TR Total Revenue $4.00 30 3 4 $3.75 35 5 8 $3.50 40 7 12 $3.25 45 9 16 $3.00 50 11 20 $2.75 55 13 24 9 $2.50 60 15 28 10 11 0123 $2.25 65 17 32 $2.00 70 19 36 $1.75 75 21 40 $1.50 80 23 44 14