Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Linda's pizza has been approached by a local hotel to sell them 70 pizzas per day (the local hotel had a kitchen fire, and

image

Linda's pizza has been approached by a local hotel to sell them 70 pizzas per day (the local hotel had a kitchen fire, and it will take a year to rebuild their kitchen). At current sales of 100 pizza per day, Linda makes $3 per pizza, calculated as follows: Selling Price Ingredient costs Kitchen costs Serving costs Profit per pizza Other information: $30 12 12 3 3 Kitchen costs of $12 per pizza include allocated fixed costs of $8 per pizza. Other costs are variable. The kitchen can make an average of 150 pizzas per day. Serving costs would not be applicable to the special order. However, an additional staff person would need to be hired to deliver the pizzas to the hotel at a cost of $100 per day. Required A. What is the minimum price per pizza that Linda would be willing to sell the 70 pizzas? B. What are possible qualitative issues that Linda should consider?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

A To determine the minimum price per pizza that Linda would be willing to sell the 70 pizzas we need to consider the additional costs associated with ... 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

Step: 3

blur-text-image

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

Modern Advanced Accounting in Canada

Authors: Hilton Murray, Herauf Darrell

8th edition

1259087557, 1057317623, 978-1259087554

More Books

Students also viewed these Accounting questions