Question
Cathy's Crepes plans a weekend discount where the price of crepes drops from $4.00 to $3.00. Promotion costs $500. Cathy expects crepe sales to increase
Cathy's Crepes plans a weekend discount where the price of crepes drops from $4.00 to $3.00. Promotion costs $500. Cathy expects crepe sales to increase by 50%, but expects a 20% drop in waffle sales. The weekly figures are:
Product | Sales Price | Variable Costs | Sales Volume |
Crepes | $4.00 | $2.00 | 300 |
Waffles | $5.00 | $2.50 | 200 |
Requirement: Analyze the impact on sales and profitability.
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Corporate Financial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
14th edition
130565353X, 978-1305887510, 1305887514, 978-1305653535
