AN ICE CREAM SHOP MAKES THREE BASIC TYPES OF ICE CREAM, VANILLA, CHOCOLATE, MANGO. THE FOLLOWING INFORMATION HAS BEEN COLLECTED.

THE FIXED COSTS ARE UNAVOIDABLE AND ARE ALLOCATED TO EACH ICE CREAM FLAVOUR BASED ON THE QUANTITY PRODUCED. THE ICE CREAM SHOP HAS EXCESS CAPACITY.

REQUIRED: WHICH PRODUCT SHOULD ICE CREAM SHOP PROMOTE IF THE PROMOTION WILL RESULT IN AN INCREASE IN SALES OF 50 SCOOPS OF THE PROMOTED ICE CREAM?

REQUIRED:

Sales price per scoop Direct cost per scoop Fixed overhead per scoop Profit per scoop Vanilla 3.00 1.50 0.50 1.00 Choxolate 3.20 1.80 0.60 0.80 Mange 3.40 2.30 0.70 (0.10)