Maria Lorenzi owns an ice cream stand she operates during the summer months in West Yellowstone, Montana. She is unsure how toprice her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number ofpeople who entered the store was roughly the same each week. During the first week, she priced the cones at $4.40 and 2,075 coneswere sold. During the second week, she priced the cones at $4.90 and 1,650 cones were sold. The variable cost of a cone is $.80 andconsists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,020 per week.Required:1. What profit did Maria earn during the first week when her price was $4.40?2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease?Note: Round your percentage answers to 2 decimal place.3. What profit did Maria earn during the second week when her price was $4.90?4. What was Maria's increase (decrease) in profits from the first week to the second week?1. Profit2. Percentage increase in selling price2. Percentage decrease in unit sales3. Profit4.%

Income statement is a financial statement that shows profitability, total revenue and total…

Answered: Maria Lorenzi owns an ice cream stand…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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