Question
Rita's Restaurant is considering a week-long discount on pasta dishes, reducing the price from $12.00 to $10.00. Promotion costs $1800. Rita expects pasta dish sales
Rita's Restaurant is considering a week-long discount on pasta dishes, reducing the price from $12.00 to $10.00. Promotion costs $1800. Rita expects pasta dish sales to increase by 25%, with a 10% decrease in dessert sales. The weekly figures are:
Product | Sales Price | Variable Costs | Sales Volume |
Pasta Dishes | $12.00 | $6.00 | 400 |
Desserts | $6.00 | $3.00 | 500 |
Requirement: Determine the impact on sales and profitability.
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Corporate Financial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
14th edition
130565353X, 978-1305887510, 1305887514, 978-1305653535
