On a chilly Sunday morning, Shaz Granger bought 30 dozen doughnuts for $75, prepared 10 litres of hot coffee and went to a farm auction. There, she sold all the coffee and all but six dozen of the doughnuts before heading home late in the afternoon. Knowing that she could not eat six dozen doughnuts herself, and that they would be worthless by the next day, she began to consider how she might sell the remaining doughnuts. Only one possibility occurred to her. If she drove across town and left the doughnuts in the lunchroom at the plant where she worked, she was sure that workers on the late shift would be happy to buy the doughnuts. She felt that the 10 kilometre round trip to the plant would cost her about $0.40 per kilometre. It would take her about half an hour to make the trip, and she decided that it would be worthwhile to drive to the plant if she were compensated $20 for her time. Shaz believes that workers will ‘forget’ to pay for one dozen doughnuts.
Required:
Prepare an analysis to determine how much Shaz would have to charge per doughnut for the doughnuts she sells at the plant in order to recover her profit goal of $20 for her time.