Question

o No late work for practice exercise will be accepted under any circumstances Question 4 1.2 pts Elena just remembered she should expect higher customer volume than normal on Saturday because the school beside the park is hosting a science fair. Parents and students will cut through the park on their way, and hopefully they'll get some barbeque. Because of the science fair, Elena expects that she can sell up to 250 plates for $8 per plate this Saturday (before considering the special order). She asks you to recalculate how accepting the order will affect the profits. Check out these notes on the costs you considered previously: Special Order B Based solely on the profit of the order, should Elena sell 100 plates to Beta Alpha Gamma for $5.25 a plate? Remember, Beta Alpha Gamma says it's all or nothing! Elena can either sell all 100 plates to Beta Alpha Gamma for $5.25 a plate or sell no plates to them. But now, if she sells the 100 plates to them, she can expect to lose 50 customers willing to pay the full price of $8. Ribs on the Run [Select] 'fill the special order because it will [Select] the business [ Select ] • Previous Next →

Answer 1

Profit from special order = Incremental contribution margin from special order – contribution margin lost on regular sales

= (5.25-5)*100 – (8-5)*50

= -$125

Hence, should not fill the special order

Lead to losses