Questions -
Q1. Home Town Grocery has invested in yogurt stands for its stores. The investment cost the company $100,000. Variable materials, preparation, and marketing costs are expected to be $1.55 a unit and fixed costs are estimated at $7,900 a year. If actual sales were 21,900 servings, what would the ROI be at a sales price of $2.65?
Q2. The Groovy Movie Chains has invested in Italian snack bars for their stores, where individual pizzas are prepared and sold. The investment cost the company $48,000. The company expects a sales volume for the new product to be 12,000 pizzas a year. Variable materials, preparation, and marketing costs are expected to be $1.65 a unit and fixed costs are estimated at $16,800 a year. Based on a desired 12% ROI, what should Groovy Movies charge as the selling price per pizza?