Carlas Cookie Company.

Use the information in the table below to calculate the financial metrics for each scenario.

Scenario 1: all cookies sold individually for $1.00, fixed costs of $50,000, variable cost of production per cookie $0.10

Scenario 2: cookies sold individually for $1.00 and in packs of 12 for $10.00, fixed costs of $50,000, variable cost of production per cookie $0.10

Scenario 3: all cookies sold individually for $1.00, fixed costs of $50,000, variable cost of production per cookie $0.10 and variable cost of promotion $0.10

Scenario 4: cookies sold individually for $1.00 and in packs of 12 for $10.00, fixed costs of $50,000, variable cost of production per cookie $0.10 and variable cost of promotion $0.10

	Scenario 1	Scenario 2	Scenario 3	Scenario 4
Individual Cookie Sales	100,000	40,000	110,000	42,000
Selling Price	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Individual Cookie Revenue
12 Pack Cookie Sales	0	6,200	0	6,700
Selling Price Per Pack	$ 10.00	$ 10.00	$ 10.00	$ 10.00
12 Pack Revenue
Total Sales Revenue
Fixed Costs	$ 50,000	$ 50,000	$ 50,000	$ 50,000
Variable Costs Per Cookie
Production	$ 0.10	$ 0.10	$ 0.10	$ 0.10
Promotion	$ -	$ -	$ 0.10	$ 0.10
Total Variable Cost Per Cookie	$ 0.10	$ 0.10	$ 0.20	$ 0.20
Cookies Sold(units)*
Total Variable Costs
Total Cost
Net Profit
Profit Margin

*To calculate the total cookies sold you must calculate the number of individual cookies sold in 12 packs and add that to the cookies sold individually

Total Cookies Sold (units) = (12*number of 12 pucks sold) + Individual Cookies Sold

Which scenario would you recommend to Carla if her objective was:

• Maximizing unit volume?
• Maximizing sales revenue?
• Maximizing profit dollars?
• Maximizing profit margin percentage?