Question
Ivy's Ice Cream is considering a month-long discount on sundaes, reducing the price from $5.00 to $4.00. Promotion costs $1000. Ivy expects sundae sales to
Ivy's Ice Cream is considering a month-long discount on sundaes, reducing the price from $5.00 to $4.00. Promotion costs $1000. Ivy expects sundae sales to increase by 40%, but expects a 10% drop in cone sales. Weekly data are:
Product | Sales Price | Variable Costs | Sales Volume |
Sundaes | $5.00 | $2.50 | 400 |
Cones | $3.00 | $1.50 | 500 |
Requirement: Evaluate the impact on sales and profitability.
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Corporate Financial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
14th edition
130565353X, 978-1305887510, 1305887514, 978-1305653535
