Part 2: Special-Order Pricing for a Snowie Event (Chapter 8)

Assume that Main Street Kent, an organization that hosts outdoor events in downtown Kent, approaches you about bringing your Snowie kiosk to the Octoberfest in Kent for one day in October. Main Street Kent will provide the cups for the event that are branded with the Kent Octoberfest logo, so you will not have any cup costs for this event. Main Street Kent will also not be charging you a registration fee for this event. Main Street Kent will allow you to advertise your business in its mailings for two months at no cost and asks you to cut your Snowie price for this one event to $3.00 in exchange for the free advertising. You have no other event scheduled for this one day in October and you would work the event by yourself (you will not pay an employee for this one-day event.) You anticipate that you will sell 200 Snowie's on this one day at Octoberfest. Do you accept Main Street Kents special price offer? Why or why not? Support your answer.

Table 1: Costs

All listed costs relate to the large size Snowie.

Ice per Snowie	$ 0.20
Spoon straw (need one per Snowie)	$ 0.02
Styrofoam cup (need one per Snowie)	$ 0.08
Napkin per sheet (need two per Snowie)	$ 0.01
Servings per gallon of syrup	28
Cost per gallon of syrup (includes concentrate, preservative, and sugar)	$ 4.25
Hourly rate for workers	$ 10.00*
Event registration fee per day	$ 25.00*
Electricity, insurance, maintenance, and permit costs per month	$ 250.00*
Kiosk rental cost per month	$ 650.00*
Purchase cost of two ice shavers (5-year life)	$ 3,180.00
Purchase cost of a flavor station (5-year life)	$ 1,080.00