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Part 2 Bill has been selling the bagels for $12.50 and $14.50 per dozen respectively, but is now concerned with his profit margin and is
Part 2 Bill has been selling the bagels for $12.50 and $14.50 per dozen respectively, but is now concerned with his profit margin and is trying to determine whether or not he can afford to offer discounts or if actually needs to raise his price. Material (ingredients), labor, and overhead costs associated with the production of the bagels are $2.00 per dozen for the plain bagels and $3.50 per dozen for bagels with other ingredients added in. Total fixed costs are expected to average $14,000 per month and should be allocated based on bagels sales (see info below) and Bill would like to earn at least $ 5,000 per month of profit from bakery sales (this should also be allocated based on number of sales) Current Bagel Sales: Plain Bagels 1200 dozen Bagels with add in 800 dozen Requirement: Determine whether or not he can afford to offer discounts on the bagels and under what conditions using breakeven/cost profit volume analysis
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