Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie. The café is considering accepting a special catering order for their "Surprise-Me-Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity. What will be the effect on operating income if Café Tropical accepts the special-order? Question 4 options: Increase of $75 Decrease of $15 Increase of $25 Decrease of $20 Increase of $15
Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie.
The café is considering accepting a special catering order for their "Surprise-Me-Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity.
What will be the effect on operating income if Café Tropical accepts the special-order?
Question 4 options:
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Increase of $75 |
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Decrease of $15 |
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Increase of $25 |
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Decrease of $20 |
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Increase of $15 |
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