The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of May, which is normally a relatively low-demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium pizza normally sells for $11.99 and has variable expenses of $2.8. Expected sales volume without the special promotion is 426 medium pizzas per week. Required: a. Calculate the total contribution margin generated by the normal volume of medium pizzas in a week. b. Calculate the total number of medium pizzas that would have to be sold during the 1-cent sale to generate the same amount of contribution margin that results from the normal volume. Note: For all requirements, do not round intermediate calculations. Round your final answer to the nearest whole dollars. a. Contribution margin b. Total number of pizzas
The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of May, which is normally a relatively low-demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium pizza normally sells for $11.99 and has variable expenses of $2.8. Expected sales volume without the special promotion is 426 medium pizzas per week. Required: a. Calculate the total contribution margin generated by the normal volume of medium pizzas in a week. b. Calculate the total number of medium pizzas that would have to be sold during the 1-cent sale to generate the same amount of contribution margin that results from the normal volume. Note: For all requirements, do not round intermediate calculations. Round your final answer to the nearest whole dollars. a. Contribution margin b. Total number of pizzas
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:The management of Rocko's Pizzeria is considering a special promotion for the last two weeks of May, which is normally a relatively
low-demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium
pizza normally sells for $11.99 and has variable expenses of $2.8. Expected sales volume without the special promotion is 426 medium
pizzas per week.
Required:
a. Calculate the total contribution margin generated by the normal volume of medium pizzas in a week.
b. Calculate the total number of medium pizzas that would have to be sold during the 1-cent sale to generate the same amount of
contribution margin that results from the normal volume.
Note: For all requirements, do not round intermediate calculations. Round your final answer to the nearest whole dollars.
a. Contribution margin
b. Total number of pizzas
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