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Helen's Hotdogs plans a special promotion reducing the price of hotdogs from $3.00 to $2.50 for two weeks. Promotion costs $800. Helen expects hotdog sales
Helen's Hotdogs plans a special promotion reducing the price of hotdogs from $3.00 to $2.50 for two weeks. Promotion costs $800. Helen expects hotdog sales to increase by 40%, but expects a 20% drop in fries sales. Weekly data are:
Product | Sales Price | Variable Costs | Sales Volume |
Hotdogs | $3.00 | $1.50 | 600 |
Fries | $2.00 | $1.00 | 500 |
Requirement: Determine the impact on sales and profits and recommend whether Helen should proceed.
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