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Gorman Catering Company has received an offer from a very important client to work a large party next month. The client has requested service for
Gorman Catering Company has received an offer from a very important client to work a large party next month. The client has requested service for 1,000 people at $120 per person. Gorman normally charges $185 per person for catering services. Assuming that facility costs will not change if the order is taken and that unit-variable costs are $110 per person, should the offer be accepted? Yes. The client is very important. lt doesn't matter if a profit is earned or not. O Yes. The company will make an extra $10,000 and it builds a relationship with an important client. No. The company is giving up $65 of revenue for every person served. O No. The company will only make $10 per person. It should look elsewhere for additional jobs
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