Question
During a typical week, Solo Supermarket sells 1,700 pounds of a food item unprepared (raw) for $3.99 per pound. The variable cost of the unprepared
During a typical week, Solo Supermarket sells 1,700 pounds of a food item unprepared (raw) for $3.99 per pound. The variable cost of the unprepared (raw) product is $1.75 per pound. Solos manager is considering whether to cook the product and sell it in her deli department for $9.99 per pound. The weekly variable cost to cook the 1,700 pounds of food in the deli is $7,850 total. Fixed costs are not affected. If Solo cooks the raw product it will lose 8% of the product per week in the preparation process. Calculate the increase or decrease in Solos weekly net income if it cooks the product and sells it in the deli for $9.99 per pound (round to nearest $1).
PLEASE SHOW ALL YOUR CALCULATIONS!
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