Question
Alex's Alehouse is considering a weekend discount on draft beers, reducing the price from $6.00 to $5.00. Promotion costs $500. Alex expects draft beer sales
Alex's Alehouse is considering a weekend discount on draft beers, reducing the price from $6.00 to $5.00. Promotion costs $500. Alex expects draft beer sales to increase by 30%, but expects a 10% drop in bottled beer sales. Weekly data are:
Product | Sales Price | Variable Costs | Sales Volume |
Draft Beer | $6.00 | $3.00 | 800 |
Bottled Beer | $5.00 | $2.50 | 600 |
Requirement: Assess the impact on sales and profitability.
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Corporate Financial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
14th edition
130565353X, 978-1305887510, 1305887514, 978-1305653535
