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11.07.2022 - 08:03

Shelly’s pizza sells an average of 230 pizzas per week, of which 40% are single-topping pizzas and 60% are supreme pizzas with multiple toppings. Singles sell for 8$ each and incur variable costs of $6. Supremes sell $14 each and incur variable costs of $

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Shelly’s pizza sells an average of 230 pizzas per week, of which 40% are single-topping pizzas and 60% are supreme pizzas with multiple toppings. Singles sell for 8$ each and incur variable costs of $6. Supremes sell $14 each and incur variable costs of $9. The contribution margin per unit and total contribution margin for singles and supremes are?

Answers (1)

Marcella April 9, 2023 в 02:57

The contribution margin is the difference between the selling price and variable cost per unit. For single-topping pizzas, the contribution margin per unit is $8 - $6 = $2. For supreme pizzas with multiple toppings, the contribution margin per unit is $14 - $9 = $5. To calculate the total contribution margin, we first need to know how many pizzas of each type are sold per week. From the problem, we know that 40% of pizzas sold are single-topping and 60% are supreme. Therefore, the number of single-topping pizzas sold is 0.4 x 230 = 92, and the number of supreme pizzas sold is 0.6 x 230 = 138. The total contribution margin for single-topping pizzas is 92 x $2 = $184. The total contribution margin for supreme pizzas is 138 x $5 = $690. Therefore, the total contribution margin for all pizzas sold per week is $184 + $690 = $874.

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