Question
The following data is used in Q26 and Q27. It will be repeated in the body of each question for ease. A catering company
The following data is used in Q26 and Q27. It will be repeated in the body of each question for ease. A catering company makes and delivers pre-packed meals to local businesses. Its fixed costs are 135000 per year It charges 3.80 for each meal. The materials for each meal cost 1.25 and delivery costs 0.20 per meal. The company usually sells 15,000 meals per week for 50 weeks of the year. A large customer goes out of business and the catering company is now only selling 10,000 meals per week and has spare production capacity. Its fixed costs remain the same. A potential customer offers to buy meals at 1.60 each (delivered). What is the normal average profit per meal? A. 2.17 B. 1.45 C. 1.63 D. 0.18
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