Question
Seven years ago, you started a crosstown delivery service. The service is an environmentally friendly business and, given all the traffic congestion, you are also
Seven years ago, you started a crosstown delivery service. The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists. You have two types of service. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs. As a way to introduce the new package service when you implemented the small package service, you charged the same price for packages as parcels. You are now wondering if you should charge different prices for the parcel and package service.
Price
Parcels and Packages
TR
MR
TC
MC
MR-MC
Profit
100
50
5,000
1,600
3,400
90
120
10,800
83
2,300
10
73
8,500
80
190
15,200
63
3,000
10
53
12200
70
260
18,200
43
3,700
10
33
14,500
60
330
19,800
23
4,400
10
13
15,400
50
400
20,000
3
5,100
10
-7
14900
40
470
18,800
-17
5,800
10
-27
13,000
30
540
16,200
-37
6,500
10
-47
9,700
20
610
12,200
-57
7,200
10
-67
5000
10
680
6,800
-77
7,900
10
-87
-1,100
Price
Parcels
TR
MR
TC
MC
MR-MC
Profit
100
0
0
1,150
-1150
90
50
4,500
90
1,650
10
802,850
80
100
8,000
70
2,150
10
60
5,850
70
150
10,500
50
2,650
10
40
7,850
60
200
12,000
30
3,150
10
20
8850
50
12,500
10
3,650
10
0
8850
40
300
12,000
-10
4,150
10
-20
7850
30
350
10,500
-30
4,650
10
-40
5850
20
400
8,000
-50
5,150
10
-60
2850
10
450
4,500
-70
5,650
10
-80
-1,150
Price
Packages
TR
MR
TC
MC
MR-MC
Profit
100
50
5,000
450
4,550
90
70
6,300
65
650
10
55
5,650
80
90
7,200
45
850
10
35
6,350
70
110
7,700
25
1,050
10
15
6650
60
130
7,800
5
1,250
10
-5
6,550
50
150
7,500
-15
1,450
10
-25
6,050
40
170
6,800
-35
1,650
10
-45
5150
30
190
5,700
-55
1,850
10
-65
3,850
20
210
4,200
-75
2,050
10
-85
2150
10
230
2,300
-95
2,250
10
-105
50
Questions....
Should the delivery service charge one price or will segmentation increase profits? What calculations of profit from each chart above will support the decision?
Clarification: Answer the first question based on the charts above and the scenario given. Then show calculations to support the profits if necessary.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cornerstones Of Financial Accounting
Authors: Jay Rich, Jeff Jones
3rd Edition
1285424409, 978-1285423678
