Question: c-10 question 2 need help with all 3 parts please Question content area top Part 1 Erosion costs.Heavenly Cookie Company reports the following annual sales

c-10 question 2 need help with all 3 parts please

Question content area top

Part 1 Erosion costs.Heavenly Cookie Company reports the following annual sales and costs for its current product line:Click on this icon to download the data from this table

Chocolate

Chip

Snicker-

doodle

Peanut

Butter

Lemon

Drop

Cream-

Filled

Volume

252,000

201,000

145,000

81,000

97,000

Price

$0.40

$0.49

$0.54

$0.49

$0.56

Cost

$0.20

$0.19

$0.16

$0.22

$0.34

Heavenly is thinking of adding Mississippi Mud brownies to the product line. The ultra-rich brownies would sell for$0.96 a piece and cost $0.70 to produce. The forecasted brownie volume is 222,000 per year. Introduction of brownies, however, will reduce cookie sales by 179,000,with the following drops in sales per cookie:100,000 in chocolate chip, 35,000 in snickerdoodle, 25,000 in peanut butter,9,000 in lemon drop, and 10,000 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 erosion cost of introducing the brownies?

(Round to the nearest dollar.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!