Assume you are the owner of a local pizzeria. You currently produce and sell 3,500 pizzas per month
Question # 00185061
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Updated on: 02/01/2016 02:57 PM Due on: 03/02/2016
Assume you are the owner of a local pizzeria. You currently produce and sell 3,500 pizzas per month with a capacity to sell 5,000 pizzas.
You have the following monthly data:
Price per pizza $10
Variable cost per pizza $3
Fixed Costs $10,000
The PTA in your town has approached you with an offer to buy pizzas at $6 per pizza. Pizza slices will be sold at $1.50 per slice during "pizza lunch" on Tuesdays. The profits the PTA reaps will defray costs of the annual "Project Graduation" for the senior class. The PTA would like to buy $800 pizzas per month.
1. Should you take the order?
2. What is the minimum price at which you would be willing to sell pizzas to the PTA?
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Rating:
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Solution: Assume you are the owner of a local pizzeria. You currently produce and sell 3,500 pizzas per month