Question
Candy Shop offers coupons in a coupon book to sell the speciality candy bars that normally sell for $1 a bar. The coupon books are
Candy Shop offers coupons in a coupon book to sell the speciality candy bars that normally sell for $1 a bar. The coupon books are sold for $8 and contain 20 coupons in a coupon book. Each coupon can be redeemed for one specialty candy bar. Number of Coupon book sales per year $500 books per year. Which contain 20 coupons. Sales price per coupon $8. The printing costs of the coupon books total is $100. The variable cost for a special candy bar is $0.30.
Required:
Determine the income or loss for the Candy Shop to sell these coupon books if all the coupons are redeemed.
Please show calculations on the profitability of selling coupon books and recommend if the company should continue selling the coupon books.
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