The wholesale cost of the fryers

Assignment Help Accounting Basics
Reference no: EM13152078

As a pricing analyst for the Value Supreme grocery chain, you are asked to prepare the analysis of a proposal to price whole frying chickens low in order to attract shoppers to Value Supreme stores.

The current price for whole fryers is $.89 per pound. The proposal is to set a promotional price of $.59 per pound. The wholesale cost of the fryers, prepackaged and ready for sale, is $.55 per pound.

By tracking past changes in sales of chicken with changes in sales of other grocery products you discover that each one pound change in the sales of whole fryers is associated with the following changes in the sales of other products:

Product
Dollar Change $CM
Fruits and Vegetables
$+.154 50%
Packaged Groceries
+.692 20%
Frozen Foods
+.114 33%
Other meat including
chicken parts
-.250
40%

(a) If this past relationship between sales of whole fryers and increased sales of other goods holds, by how much must chicken sales increase to make this price promotion profitable?
(b) How might you structure the promotion to increase the likelihood that additional chicken sales will in fact result in a corresponding high level of sales for other products?
(c) Could this store have profitably promoted whole fryers at $.49 per pound?

Reference no: EM13152078

Questions Cloud

Conceptual rationale for methods of matching depreciation : Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?
Derive the equation for the firm short-run total cost curve : Solve the firm's short-run cost-minimization when capital is fixed at a quantity of 5 units (i.e. K ? = 5). Derive the equation for the firm's short-run total cost curve as a function of quantity Q and graph it together with the long-run total co..
Determine the exact genotype of the pea plant : You were given a pea plant with long stems and axial flowers and are asked to determins its genotype. You know that the allele for long stem is dominant over short and the allele for axial flowers is dominant over terminal flowers. Describe the on..
Using least-squares regression estimate the variable cost : Using least-squares regression, estimate the variable cost elements of monthly car wash costs.
The wholesale cost of the fryers : The current price for whole fryers is $.89 per pound. The proposal is to set a promotional price of $.59 per pound. The wholesale cost of the fryers, prepackaged and ready for sale, is $.55 per pound.
Franchises that operate from commerical building : Why might you expect to see flat royalty payments in home based franchises but reveneue based royalities in franchises that operate from commerical building?
Lower of cost or market for ending inventory : Compute the lower of cost or market for ending inventory assuming Lopez applies the lower of cost or market rule to inventory as a whole. Must Lopez adjust the reported inventory value? Explain.
Calculate the ph : a solution is made by mixing 20.0 mL 0.4 M NaCH3COO with 30.0 mL 0.4 M CH3COOH, calculate the pH? For acetic acid, Ka = 1.76 x 10-5.
What will be this monopolist total economic profit : What price will the firm charge in each market? Based solely on these two prices, which market has the higher price elasticity of demand? What will be this monopolist's total economic profit?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Fixed costs for the production and marketing

Suppose the product manager of a new Flower Mills cereal has determined that the appropriate wholesale price for a carton of the new cereal is $48. The fixed costs for the production and marketing of the new product are $15million.

  How will any marital deduction be determined

Bernice dies, and under a will, passes real estate to her surviving husband. The real estate is subject to a mortgage. For estate tax purposes, how will any marital deduction be determined? Can Bernice's estate deduct the mortgage under 2053? Expl..

  Sample of accounts payable for confirmation

Select a sample of accounts payable for confirmation, emphasizing vendors with a large balance and those that the client transacts with frequently, but include several with small and zero balances.

  Amount for bad debt expense of swan comp[any

Swan Inc is an accural basis taxpayer. Swan uses the aging approach to calculate the reserve for bad debts. During 2010, the following occur associated with bad debts: What is the amount for bad debt expense?

  Determining time and material pricing method

With the time and material pricing method, the hourly time charge is typically set equal to:

  Differential income or loss from discontinuing

The total fixed costs of $50,000 are allocated on the basis of sales volume across the three product lines. The small product line has 30% of the sales volume. What is the differential income or loss from discontinuing the small speaker product li..

  Corporation balance of retained earnings

How will the declaration and distribution of a 10 percent stock dividend affect the issuing corporation's balance of retained earnings and total stockholders' equity, respectively?

  Determining the choice of an allocation base

"Cost allocation is arbitrary, so there is nothing gained by it. We should report only the costs we know are direct." Do you agree? Why?

  Discuss how you will report the breach

Assume that you are a key member on an audit engagement team and discover a breach in internal controls. Discuss how you will report the breach and your expectations of management for a resolution to the breach.

  Financial statements for exteral reporting purpose

A company acquires a subsidiary and will prepare consolidated financial statements for exteral reporting purposes. For internal reporting purposes, the company has decided to apply the initial value method. Why might the company have made this dec..

  What are the effects of the annuity of betty gross income

On July 1, 1998, when Betty was 65 years old, she purchased an annuity contract for $108,000. The annuity was to pay Betty $9,000 on June 30 each year for the remainder of her life. Betty died on March 31, 2011. What are the effects of the annuity..

  Balanced scorecard and perspectives on performance

Make notes on the following two items to help your manager to understand their meaning: The balanced scorecard and its perspectives on performance

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd