Question
Pats Pizzeria produces three types of deli style pizzas: Thin Crust, Deep Dish, and Stuffed Crust. Pats anticipated sales mix is 7:5:4 Thin:Deep:Stuffed. Current sales
Pats Pizzeria produces three types of deli style pizzas: Thin Crust, Deep Dish, and Stuffed Crust. Pats anticipated sales mix is 7:5:4 Thin:Deep:Stuffed. Current sales are 1,500 bundles per year. Round all interim answers to 4 decimal places.
Thin CrustDeep DishStuffed CrustUnit Selling Price$13$18$15Unit Variable Cost$5$9$7Fixed costs are estimated at $50,000, which include $44,000 for general overhead, such as rent, utilities, etc., and $6,000 for advertising. Pats tax rate is 25%.
What is the minimum percentage sales would need to increase before Pat would consider the additional advertising? (Hint- how much additional sales revenue is needed to earn at least the same profit she had without advertising?)
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