Question: Copper Hill is trying to decide if it should do a buy 1 get 1 free promotion for its copper mugs. Currently the cost to

Copper Hill is trying to decide if it should do a buy 1 get 1 free promotion for its copper mugs. Currently the cost to make each mug is $10. The mugs currently sell for $30. In addition, Copper Hill also has a shipping cost of $1 per mug to send the mug to each customer. The fixed costs for Copper Hill are typically $3,000 a month.

If Copper Hill sells a total of 700 mugs at full price (and then an additional 700 mugs are given out free since we are assuming every copper mug purchase used the buy one get one free), what is Copper Hill's estimated operating income for the month?

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