Practise defining, calculating and explaining contribution per unit and total contribution in IB Business Management HL decisions.
Jill Anderson operates a restaurant. Although Jill’s meals are viewed as being excellent quality, sales are slowing.
Jill Anderson
Jill Anderson operates a restaurant. Although Jill's meals are viewed as being excellent quality, sales are slowing. Jill is considering replacing existing meals with gluten-free meals. The following financial and forecast information is for the month of May 2018. Jill's restaurant can only produce either existing or gluten-free meals.
Table 1: Existing meals
Table 2: Estimated costs and price if Jill produces the gluten-free meals
A local gluten-free manufacturer, which is not part of Jill's existing supply chain, has offered to supply already prepared gluten-free meals at per meal. Jill is unsure whether to make or buy the gluten-free meals.
Calculate:
the total contribution of existing meals sold per month (show all your working);
the contribution per unit of a gluten-free meal if Jill decides to buy-in the gluten
free meals (show all your working).