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 280 at a price of $3.81 each. They noticed the cannibalization rate of fat-free brownies on Fudgie brownies was 49%. Bakers Score's sells their "Fudgie" brownies for $3.01, with a variable cost of $1.28. The new Fat-Free Brownies have a variable cost of $1.50.
What is the effective unit margin ($) including the impact of cannibalization for Fat-Free Brownies, assuming the original estimate of cannibalization.
CALCULATED VARIABLES: ffmarg = $2.31 nwcontr = $2,658 wcontr = $2,249
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