Maldives Winery operates a wine outlet in a tourist area. One litre bottles sell for $12. Daily fixed costs are $3,000, and variable costs are $6 per litre. An average of 750 litres are sold each day. Maldives has a capacity of 800 litres per day.

Required: Show all your calculations for full marks.

a. Determine the average cost per bottle.

b. A bus loaded with 40 senior citizens stops by at closing time and the tour director offers Maldives $300 for 40 litres. Maldives refuses, saying they would lose $2.50 on each litre. Is Maldives correct about the $2.50? Why or why not? Make sure to consider relevance.

c. A fund-raising organization has offered Maldives a one-year contract to buy 300 litres a day for $7.50 each. Should they accept the offer? Why or why not? Make sure to consider relevance.