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A local vendor at the county fair sells snow cones for $3 each. When 250 snow cones are sold, each snow cone is estimated to have $.10 in variable costs and $.15 in fixed costs. A local school group plans on attending the fair next week and wishes to purchase 50 snow cones for $.25 each. The vendor can sell as many as 400 snow cones per day.


If the special order were accepted, net income would:

Respuesta :

facundobuzzetti

Answer:

Effect on income= $7.5 increase

Explanation:

Giving the following information:

When 250 snow cones are sold, each snow cone is estimated to have $.10 in variable costs and $.15 in fixed costs.

Offer= 50 snow cones for $.25 each.

Because it is a special offer and there is unused capacity (I assume that the vendor sells 250 units), we will not take into account the fixed costs.

Effect on income= 50*(0.25-0.10)= $7.5 increase

The Effect on income is $7.5 increase

Calculation of the net income:

since when 250 snow cones are sold, each snow cone is estimated to have $.10 in variable costs and $.15 in fixed costs.

And,

Offer= 50 snow cones for $.25 each.

So,

Effect on income is

= 50*(0.25-0.10)

= $7.5 increase

Learn more about net income here: https://brainly.com/question/6659226

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