Special-Order Pricing Barry's Bar-B-Que is a popular lunch-time spot. Barry is conscientious about the quality...

50.1K

Verified Solution

Question

Accounting

image
Special-Order Pricing Barry's Bar-B-Que is a popular lunch-time spot. Barry is conscientious about the quality of his meals, and he has a regutar crowd of 500 patrons for his $9.10 lunch. His variable cost for each meal is about $3.20, and he figures his fixed costs, on a dally basis, are about $2,400. From time to time, bus-tour groups with 50 patrons stop by. He has welcomed them because he has capacity to seat 600 diners in the average lunch period, and his cooking and wait staff can easily handle the additional load. The tour operator generally pays for the entire group on a single check to save the wait staff and cashier the additional time. Due to competitive conditions in the tour business, the operator is now asking Barry to lower the price to $4.50 per meal for each of the 50 bus-tour members, (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Required: 1-a. What is the incremental profit (loss) per bus-tour meal? 1b. Should Barry accept the bus-tour offer? 2-a. At least once per month, the tour company is in a position to guarantee 200 patrons (or four bus loads) in a single day. On those days, the tour company is asking for an even lower price of $4.00 per meal. What is the incremental profit (loss) for each meal? 2 -b. Is the offer financially attractive? Complete this question by entering your answers in the tabs below. What is the incremental profit (loss) per bus-tour meal

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students