Ormand Organic Grocery has invested in a yogurt stand for its store.The investment cost the company $100,000.Variable materials,preparation,and marketing costs are expected to be $0.60 per unit and fixed costs are estimated at $6,000 a year.If actual sales were 20,000 servings,what would the ROI be using the sales price of $1.80?
A) 30.0%
B) 22.0%
C) 18.0%
D) 24.0%

Question

Quizplus · Accepted Answer

First, we need to calculate the total costs:

Variable costs = 20,000 x $0.60 = $12,000

Fixed costs = $6,000

Total costs = $12,000 + $6,000 = $18,000

Next, we need to calculate the total revenue:

Total revenue = 20,000 x $1.80 = $36,000

Finally, we can calculate the ROI:

ROI = (Total revenue - Total costs) / Investment x 100

ROI = ($36,000 - $18,000) / $100,000 x 100

ROI = 18%

Therefore, the best choice is C, with an ROI of 18%.

Ormand Organic Grocery Has Invested in a Yogurt Stand for Its