In the last year, Bakers Score's Donuts and Sweets has sold, on average, 1,000 ''Fudgie'' brownies per
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In the last year, Bakers Score's Donuts and Sweets has sold, on average, 1,000 ''Fudgie'' brownies per week. This week they introduced fat-free brownies and sold 200 at a price of $3.84 each. They noticed the cannibalization rate of fat-free brownies on Fudgie brownies was 46%. Bakers Score's sells their "Fudgie" brownies for $3.10, with a variable cost of $1.40. The new Fat-Free Brownies have a variable cost of $1.64. What is the effective unit margin ($) including the impact of cannibalization for Fat-Free Brownies, assuming the original estimate of cannibalization.
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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