Activity 18-5: The Case of Mallory's LemonadeStand (B)It is March 2019 and Mallory has come a long way since last summer. Herlemonade was a hit – everyone raved about her secret formula (she addedsome special spices suggested by her grandmother). When Mark Cuban(billionaire investor) happened to drive through the neighborhood he hada cup of Mallory's lemonade and offered to invest in the company. SoMallory's Lemonade Stand Lemonade will soon be found in a limitednumber of local Whole Foods Stores. Mallory had to figure out somepricing. She started with the knowledge that retailers would want to sellher 20 oz bottles for $2.00 at retail.Mallory figured her costs as follows:•$10,000 in fixed costs for various costs including some localadvertising she to support Whole Foods.· A co-packer (company that manufactures food products tospecifications) will charge $.50 for each 20 oz bottle – includingbottles, packages, and delivery.• Mallory assumes she can sell 30,000 bottles.• Mallory plans to charge Whole Foods $1.00 each for the bottles.Whole Foods will charge $2.00.• Using average cost pricing, she is counting on a $5000 profit.1. Assuming the numbers shown here, what is Whole Foods markuppercent on each bottle of Mallory's Lemonade Stand Lemonade?2. Using Mallory's projected sales of 30,000 bottles, calculate Mallory's:a) average fixed cost, b) average variable cost, and c) total profit?3. What is Mallory's profit if sales only turn out to be 15,000 bottles?

Markup Percentage = ((Selling Price - Cost)/Costs) * 100 Fixed and Variable cost - We know that…

Answered: a) average fixed cost, b) average…

Business

Accounting

a) average fixed cost, b) average variable cost, and c) total profit?

Accounting Information Systems

11th Edition

ISBN:9781337552127

Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill

Publisher:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill

Chapter17: Acquiring And Implementing Accounting Information Systems

Section: Chapter Questions

Problem 5P: TM Office Supplies, Inc., is a wholesale distributor of office supplies. It sells pencils and pens,...

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