Question
The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of October, which is normally a relatively low-demand period. The
The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of October, which is normally a relatively low-demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium pizza normally sells for $11.99 and has variable expenses of $3.2. Expected sales volume without the special promotion is 395 medium pizzas per week. |
Required: | |
(a) | Calculate the total contribution margin generated by the normal volume of medium pizzas in a week.(Do not round your intermediate calculations. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) |
Contribution margin | $ |
(b) | Calculate the total number of medium pizzas that would have to be sold during the 1-cent sale to generate the same amount of contribution margin that results from the normal volume. (Do not round your intermediate calculations. Round your answer to the nearest whole number.) |
Number of pizzas |
revenues-variable expense=contribution margin
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