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Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778 Exercise 38
Contribution Margin versus Responsibility Margin
Marshall's grocery store has a small bakery'that sells a. variety of baked goods. The manager of the bakery responsibility center has decided to sell a cup of coffee and doughnut combo at the low price of $1.75, as a means of attracting customers. The incremental cost of labor per combo sale has been calculated as $0.89, the variable cost of the doughnut is $0.37, and the variable cost of the coffee (including cup) is $0.42. What is the contribution margin for the combo? How does the manager think the combo will affect the bakery's responsibility margin?
Marshall's grocery store has a small bakery'that sells a. variety of baked goods. The manager of the bakery responsibility center has decided to sell a cup of coffee and doughnut combo at the low price of $1.75, as a means of attracting customers. The incremental cost of labor per combo sale has been calculated as $0.89, the variable cost of the doughnut is $0.37, and the variable cost of the coffee (including cup) is $0.42. What is the contribution margin for the combo? How does the manager think the combo will affect the bakery's responsibility margin?
Explanation
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a. Computation of contribution margin is...
Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
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