## Question

# Each year The Calendar Shop orders calendars for the coming year. Anticipated demand for the coming year is for 2000 calendars. The Shop's fixed costs

Each year The Calendar Shop orders calendars for the coming year. Anticipated demand for the coming year is for 2000 calendars. The Shop's fixed costs are $750. Each calendar cost $3 and The Calendar Shop sells each one for $5.00. At the end of July during the next year, The Shop will reduce the calendar price to 60% of the original selling price and will sell all the surplus calendars at this price. Assume the original selling price varies from $4.00 to $7.25 in increments of $0.25. The Calendar Shop can order in increments of 250 calendars up to a maximum of 4000 calendars. Answer the questions below. For each question, start with the original conditions given here.

1.If the sale price is set at $4.50, and the order quantity is 3000, the Calendar Shop will make a profit of :

A. | $1,300 | |

B. | $1,950 | |

C. | $2,600 | |

D. | $3,250 |

2. With the highest order volume and the highest sale price, the Calendar Shop can expect to make a profit of:

A. | $7,750.00 | |

B. | $10,450.00 | |

C. | $8,050.00 | |

D. | $11,800.00 |

3. The Calendar Shop will make a profit of $7,250 at a sale price of _____ and order quantity of _____ :

A. | $6.00 and 4,000 | |

B. | $6.50 and 3,250 | |

C. | $7.00 and 2,000 | |

D. | $7.25 and 1,000 |

## Step by Step Solution

There are 3 Steps involved in it

### Step: 1

To solve these problems we need to use the given information and calculate the profit for each scenario 1 If the sale price is set at 450 and the orde...### Get Instant Access to Expert-Tailored Solutions

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### Step: 2

### Step: 3

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