Question
Katie's Kafe plans a weekend discount on cappuccinos, reducing the price from $4.00 to $3.00. Promotion costs $800. Katie expects cappuccino sales to increase by
Katie's Kafe plans a weekend discount on cappuccinos, reducing the price from $4.00 to $3.00. Promotion costs $800. Katie expects cappuccino sales to increase by 40%, with a 15% decline in espresso sales. Weekly data are:
Product | Sales Price | Variable Costs | Sales Volume |
Cappuccinos | $4.00 | $2.00 | 500 |
Espressos | $3.00 | $1.50 | 600 |
Requirement: Determine 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
