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Lenny runs a cake store that sells only one type of cake with a variable cost per unit of $5. Current sales are 3,000 cakes
Lenny runs a cake store that sells only one type of cake with a variable cost per unit of $5. Current sales are 3,000 cakes per week at $15 per cake. A price promotion that cuts price to 75% of the current level is being considered. Lenny checks and finds that 30% of cake customers also buy a coffee (the rest do not buy anything else). Lenny makes a dollar contribution from each coffee.Please answer the following questions:
Given the coffee sales what was the weighted average contribution per customer before any price promotion was runStep by Step Solution
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