MK METRICS

#2

Mimi's has priced its established Banana Nut muffin at $10.59 per unit. Variable cost is $6.39 per unit. Mimi's will price its new Savory Stuffed muffin at $11.42 per unit, with variable cost of $6.30 per unit. Mimi's estimates the cannibalization rate at 48%. Compute weighted contribution margin for the Svory Stuffed muffin. (Rounding: penny.)

#3

Mimi's new Savory Stuffed muffin will compete with Mimi's established Banana Nut muffin. Contribution margin on the Banana Nut muffin is $7.21 per unit, while contribution margin on the new Savory Stuffed muffin will be $6.90 per unit. Mimi's expects a cannibalization rate of 26%. Launching the new Savory Stuffed muffin will involve fixed costs of $52,770. How many units of the new Savory Stuffed muffin must Mimi's sell in order to break even on the launch--accounting for the cannibalization? (Rounding: tenth of a muffin.)

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