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Paxi provides a shuttle service between the train station and the airport and charges a flat fee of $41 per trip. Variable costs are $22
Paxi provides a shuttle service between the train station and the airport and charges a flat fee of $41 per trip. Variable costs are $22 per trip and fixed costs are $8,000. Pat, the owner, believes that if the price were decreased by $10 per trip that sales would increase significantly. If current profit is $20,806, how many additional trips would Paxi need to make to maintain the same level of profitability? Mondo Athletic Shoes has just come out with an all-terrain running shoe. The product manager for Mondo Plus, the company's premium running shoe is anticipating the new shoe will cannibalize some of the sales of Mondo Plus. The company, however, is convinced that their overall profits will increase and showed the product manager the numbers. Assuming a 17% cannibalism rate, and using the data in the chart below, what is the TOTAL monthly contribution CHANGE in dollars after the introduction of the new shoe? Mondo Plus Premium Running Shoe New All-Terrain Running Shoe (Current Monthly Sales). (Projected Monthly Sales) Sales Price $120 $88 Contribution Per Unit||$84 $48 Unit Sales 600 873
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