Question: Special - Order Pricing Barry s Bar - B - Que is a popular lunch - time spot. Barry is conscientious about the quality of
SpecialOrder Pricing Barrys BarBQue is a popular lunchtime spot. Barry is conscientious about the quality of his meals, and he has a regular crowd of patrons for his $ lunch. His variable cost for each meal is about $ and he figures his fixed costs, on a daily basis, are about $ From time to time, bustour groups with patrons stop by He has welcomed them because he has capacity to seat diners in the average lunch period, and his cooking and wait staff can easily handle the additional load. The tour operator generally pays for the entire group on a single check to save the wait staff and cashier the additional time. Due to competitive conditions in the tour business, the operator is now asking Barry to lower the price to $ per meal for each of the bustour members.
Note: Negative amounts should be indicated by a minus sign. Round your answers to decimal places.
a What is the incremental profit loss per bustour meal? $ is correct
b Should Barry accept the bustour offer? yes correct
a At least once per month, the tour company is in a position to guarantee patrons or four bus loads in a single day. On those days, the tour company is asking for an even lower price of $ per meal. What is the incremental profit loss for each meal? The answer $ is incorrect.
b Is the offer financially attractive? no is correct. I thought it was strange that I got as my answer for a but then the correct answer for b is that its not attractive so I assume it should be negative but I am unsure what to do from here.
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