Question
In the last year, Bakers Score's Donuts and Sweets has sold, on average, 1,300 ''Fudgie'' brownies per week. This week they introduced fat-free brownies and
In the last year, Bakers Score's Donuts and Sweets has sold, on average, 1,300 ''Fudgie'' brownies per week. This week they introduced fat-free brownies and sold 270 at a price of $3.88 each. They noticed the cannibalization rate of fat-free brownies on Fudgie brownies was 46%. Bakers Score's sells their "Fudgie" brownies for $3.05, with a variable cost of $1.37. The new Fat-Free Brownies have a variable cost of $1.51.
What is the weekly contribution ($) for Bakers Score's "Fudgie" brownie before the introduction of their Fat-Free Brownies?
What was the percentage sales decrease that Fudgie brownies incurred?
What is the new total weekly contribution ($) for Bakers Score's Donuts after the launch of the Fat-Free variety?
In week 2, "Fudgie" brownie sales dropped to 850 units sold, while sales for Fat-Free brownies remained constant. If all of the decrease in Fudgie sales is due to the fat-free product, what would be the new cannibalization rate?
Assuming fixed costs for Fat-Free brownies are $350, how many of this new product will they have to sell to break even before cannibalization is taken into consideration?
What is the unit margin ($) for Fat-Free Brownies before cannibalization is taken into consideration?
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