# The management of Rockos Pizzeria is considering a special promotion for the last two weeks of October,

## Question:

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.

c. What other factors should management consider in evaluating the pros and cons of the special promotion?

Contribution Margin

Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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**Related Book For**

## Accounting What the Numbers Mean

**ISBN:** 978-0073527062

9th Edition

**Authors:** David H. Marshall, Wayne W. McManus, Daniel F. Viele,