Essay
The owner of Spicy's Gourmet Popcorn is concerned because the stand has been averaging sales of only 7,500 cartons per month, the stand and staff can make 15,000 cartons of popcorn per month. The variable cost of each carton is $1.50. Monthly fixed costs are (taxes, licenses, space rent and salaries) are $10,000. The owner believes he could sell 15,000 cartons per month if he cuts the sales price from $5.50 to $5.00 per carton. How much extra profit (above the current level) would he generate if he decreased the sales price?
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New profit = (15,000 × $5.00) ...View Answer
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