2.37 Engineered Estimate of Cost, Cost-based Price Julie Long, the manager of the Hamburger Haven, has been told that to earn a reasonable profit, she should price her hamburgers at 300% of the cost of ingredients. Ms. Long has gathered the following data on the cost of ingredients used to make a hamburger: 1. Preformed frozen hamburger patties are purchased from a distributor. Each pound includes seven patties. The distributor charges $1.69 per pound. 2. Hamburger buns are purchased for $1.29 per dozen. 3. Dill pickle slices are purchased by the gallon jar. A gallon costs $8.95 and contains roughly 2,000 pickle slices. Four slices are placed on each burger. 4. Large, ripe tomatoes currently sell for $0.69 each. One tomato yields eight slices, and one slice is placed on each burger. 5. A $0.99 head of lettuce provides enough lettuce for 40 burgers. 6. Mayonnaise is purchased in 16-ounce jars for $1.49. One-quarter ounce of mayonnaise is placed on a burger. 7. A $0.99 jar of mustard provides enough mustard for 150 burgers. 8. A $0.99 jar of ketchup is sufficient for 50 burgers. 9. A pound of cheese yields 16 slices. Cheese costs $2.59 per pound, and each cheeseburger receives 1 slice. 10. Onions cost $0.15 each and yield enough chopped onions for 45 hamburgers. REQUIRED A. What is the cost of ingredients for a plain burger (meat and bun only)? B. What is the cost of materials and suggested selling price for a burger with everything except cheese? C. People are willing to pay only $0.25 extra for cheese. What price should Ms. Long charge for a hamburger with everything except cheese if she wants the price of a cheeseburger with everything to be 300% of the cost of ingredients? D. Should Ms. Long consider her competitors' prices in addition to her costs? Explain