Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Last year, the company sold 50,000 units and had the below sales and cost figures. Adding Food - Total sales in the number of units

image text in transcribed
Last year, the company sold 50,000 units and had the below sales and cost figures. Adding Food - Total sales in the number of units would increase 25% (df added) - The average sales price per unit would increase from the current $3.00 to $5.00 (if added) - The variable cost per unit would increase to $2.50 per unit to account for the added cost (if added) - There would be an increase in foxed costs of $25,000 for advertibing (ff added) Adding Drive Up Window - This alternative is exclusive of Adding Food Option - Total sales in the number of units would go up 1308 from last year. - The construction of the drive up window would increme fixed costs by 5130,000 - which represents 1 construction \& installation costs. - Drive Up Window would allow an increase in average sales to $3.20 a cup of coffee and variable cost per unit would remain the came at sa.90 per unit. 1.) The company can only pick one of the altematives (Ether Adding Food or Drive Up Window), due to the time and resources involved. Analyze and compare your calculations above for option 1 and option 2. which altemative do you recommend? Explain which alternative you recommend and why, You will need to state 2 qualitative reasons and 3 quantitative roasons

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing An Introduction To International Standards On Auditing

Authors: Rick Stephan Hayes, Roger Dassen, Arnold Schilder, Philip Wallage

2nd Edition

0273684108, 978-0273684107

More Books

Students also viewed these Accounting questions

Question

Describe the new structures for the HRM function. page 724

Answered: 1 week ago