Requirement 3. The owner has been considering ways to increase the sales volume. The owner thinks that 10,000 pizzas could be sold per month by cutting the selling price per pizza from $6.25 to $5.75. How much extra profit (above the current level) would be generated if the selling price were to be decreased? (Hint: Find the restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) Identify the profit formula and compute the monthly profit at the current and the new volume.

Answer and Explanation:

The computation of the extra profit above the current level is shown below:

Volume                New 10,000 units                 Old 7,500 units  

Selling Price             $57,500                                $46,875

                        (10,000 × $5.75)                          (7,500 × $6.25)

Less:

Variable cost at $1.55 ($15,500)                                 ($11,625)

                        (10,000 × $1.55)                          (7,500 × $1.55)

Less:

Fixed Cost                ($12,000)                                    ($12,000)

Profit                         $30,000                                     $23,250

As it can be seen that there is an extra profit of $6,750

= $30,000 - $23,250

= $6,750

So, the company should able to reduce the selling price per unit at 10,000 units

Here profit formula is

Profit = Sales - variable cost - fixed cost

answer: penis

explanation:

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi