Bene Petit First year operating data: Single Dual Family (1 serving) (2 servings) (4 servings) Total...
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Bene Petit First year operating data: Single Dual Family (1 serving) (2 servings) (4 servings) Total Customer Meals Sold 3,000 5,000 12,000 20,000 Total Customer Servings 3,000 10,000 48,000 61,000 Customer Orders (Average 4 meals per order) 750 1,250 3,000 5,000 Number of Donated Meals (1 per customer meal) 3,000 5,000 12,000 20,000 Number of Donated Deliveries (500 meals per delivery) 6 10 24 40 Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-sized. Single-serve meals make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor is trying to decide whether to eliminate single-serve meal kits but is unsure how it would affect profit and the number of meals donated to homeless families. The following additional details are available: The variable costs of the single serve meals (as well as the donated meals) could be avoided. About 10% of the fixed costs that are currently allocated to the single serve meals could be avoided. Taylor believes that about 25% of single serve customers would switch to dual-serving meals, but would reduce their order size to from 4 meals per week to 2 meals per week. Should Taylor eliminate the single-serve meals from her product/service offering? Why or why not? Bene Petit First year operating data: Single Dual Family (1 serving) (2 servings) (4 servings) Total Customer Meals Sold 3,000 5,000 12,000 20,000 Total Customer Servings 3,000 10,000 48,000 61,000 Customer Orders (Average 4 meals per order) 750 1,250 3,000 5,000 Number of Donated Meals (1 per customer meal) 3,000 5,000 12,000 20,000 Number of Donated Deliveries (500 meals per delivery) 6 10 24 40 Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-sized. Single-serve meals make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor is trying to decide whether to eliminate single-serve meal kits but is unsure how it would affect profit and the number of meals donated to homeless families. The following additional details are available: The variable costs of the single serve meals (as well as the donated meals) could be avoided. About 10% of the fixed costs that are currently allocated to the single serve meals could be avoided. Taylor believes that about 25% of single serve customers would switch to dual-serving meals, but would reduce their order size to from 4 meals per week to 2 meals per week. Should Taylor eliminate the single-serve meals from her product/service offering? Why or why not?
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