Question
BigSandwich is a national fast food chain. They sell meal deals but recently have been concerned about the pricing and profitability of their meals. The
BigSandwich is a national fast food chain. They sell meal deals but recently have been concerned about the pricing and profitability of their meals. The unit variable costs for each meal deal is $2.15 and a meal is sold to the customer for $4.79. The average number of meals sold per day is 1099.
1. What is the total daily contribution margin $ ?
2. At the current unit variable costs of a meal, what price would BigSandwich have to charge if they want to increase the contribution margin by 10% ? (hint: you have to add 10% to the prior margin answer)
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