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What is the erosion cost of introducing the brownies? What is the net change in annual margin if Mississippi Mud brownies are added to the
What is the erosion cost of introducing the brownies?
Erosion costs. Heavenly Cookie Company reports the following annual saies and costs for its current product line: Click on this icon = to downioad the data from this table Heavenly is thinking of adding Mississippi Mud brownies to the product line. The ultra-rich brownies would sell for $0.90 a piece and cost $0.70 to produce. The forecasted brownie volume is 224,000 per year. Introduction of brownies, however, will reduce cookle sales by 18.000, with the following drops in sales per cookie: 112,000 in chocolate chip, 35,000 in snickerdoodle, 25,000 in peanut butter, 7,000 in lemon drop, and 9.000 in cream-filled. What is the erosion cost of introducing the brownies? What is the net change in annual margin if Mississippi Mud brownies are added to the product line What is the net change in annual margin if Mississippi Mud brownies are added to the product line?
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