The monthly fixed cost of a local convenience store is $5,000 USD, which includes utility fees,...
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The monthly fixed cost of a local convenience store is $5,000 USD, which includes utility fees, labor costs, insurance, property tax, depreciation, etc. Due to inflation pressure, the store is considering increasing the price of its most popular item - coffee - by 30 cents. The store is part of a national chain that manages its coffee bean production, so the variable cost for coffee will not change. Additionally, it has been determined that the cost of coffee is already low, and the price increase is not expected to negatively impact sales in terms of quantity or other items. The table below provides the product mix you need to consider for this analysis. Item Retail Price per Unit Unit Quantity Expected Variable Cost Coffee Sandwich Beef Jerky Grocery 0.99 Cup 5,000.00 0.45 2.29 Bag 2,000.00 1.59 7.00 Pack 500.00 5.00 1.25 Pound 10,000.00 1.10 1. What is the multiproduct breakeven sales revenue BEFORE the change? Please copy/paste the table used for the calculation in the space below and offer the final solution. 2. What is the multiproduct breakeven sales revenue AFTER the change? Please copy/paste the table used for the calculation in the space below and offer the final solution. 3. How much does the store's breakeven sales revenue burden decrease by increasing the coffee price by $0.30? The monthly fixed cost of a local convenience store is $5,000 USD, which includes utility fees, labor costs, insurance, property tax, depreciation, etc. Due to inflation pressure, the store is considering increasing the price of its most popular item - coffee - by 30 cents. The store is part of a national chain that manages its coffee bean production, so the variable cost for coffee will not change. Additionally, it has been determined that the cost of coffee is already low, and the price increase is not expected to negatively impact sales in terms of quantity or other items. The table below provides the product mix you need to consider for this analysis. Item Retail Price per Unit Unit Quantity Expected Variable Cost Coffee Sandwich Beef Jerky Grocery 0.99 Cup 5,000.00 0.45 2.29 Bag 2,000.00 1.59 7.00 Pack 500.00 5.00 1.25 Pound 10,000.00 1.10 1. What is the multiproduct breakeven sales revenue BEFORE the change? Please copy/paste the table used for the calculation in the space below and offer the final solution. 2. What is the multiproduct breakeven sales revenue AFTER the change? Please copy/paste the table used for the calculation in the space below and offer the final solution. 3. How much does the store's breakeven sales revenue burden decrease by increasing the coffee price by $0.30?
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Pricing Strategies A Marketing approach
ISBN: 978-1412964746
1st edition
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