Question: Exercise 1 2 - 1 8 ( Algo ) Special promotion - effects of a 1 - cent sale LO 1 2 - 8 ,

Exercise 12-18(Algo) Special promotion-effects of a 1-cent sale LO 12-8,12-9
The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of May, which is normally a relatively low-demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium pizza normally sells for $13.99 and has variable expenses of $2.6. Expected sales volume without the special promotion is 425 medium pizzas per week.
Required:
a. Calculate the total contribution margin generated by the normal volume of medium pizzas in a week.
b. Calculate the total number of medium pizzas that would have to be sold during the 1-cent sale to generate the same amount of contribution margin that results from the normal volume.
Note: For all requirements, do not round intermediate calculations. Round your final answer to the nearest whole dollars.
a. Contribution margin
b. Total number of pizzas
Exercise 1 2 - 1 8 ( Algo ) Special promotion -

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 Accounting Questions!