Annie's Homemade makes the brownies it adds to vanilla fudge brownie ice cream. The company is deciding whether it should sell brownies as a stand-alone product or always cut them into smaller pieces and add them to the vanilla fudge brownie ice cream. The cost to make 12 three-ounce brownies is $4.00. Each three-ounce brownie could be sold for $2.00. It costs $0.20 to cut a three-ounce brownie into pieces and add it to ice cream. A six-ounce serving of vanilla fudge brownie uses one ounce of brownies plus $1.10 of other ingredients and labor while selling for $5.00. 1) What total revenue does Annie's earn when it adds a three-ounce brownie to servings of vanilla fudge brownie ice cream? 2) What is the sales value of a three-ounce brownie at the split-off point? 3)What is the incremental revenue from further processing a three-ounce brownie? 4)
Annie's Homemade makes the brownies it adds to vanilla fudge brownie ice cream. The company is deciding whether it should sell brownies as a stand-alone product or always cut them into smaller pieces and add them to the vanilla fudge brownie ice cream. The cost to make 12 three-ounce brownies is $4.00. Each three-ounce brownie could be sold for $2.00. It costs $0.20 to cut a three-ounce brownie into pieces and add it to ice cream. A six-ounce serving of vanilla fudge brownie uses one ounce of brownies plus $1.10 of other ingredients and labor while selling for $5.00. 1) What total revenue does Annie's earn when it adds a three-ounce brownie to servings of vanilla fudge brownie ice cream? 2) What is the sales value of a three-ounce brownie at the split-off point? 3)What is the incremental revenue from further processing a three-ounce brownie? 4)
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