Question

The Dynatech Brewing Company is a small craft brewer that produces five standard varieties of beer. The beers sell for $6 per six-pack, and the company currently sells 7,000 six-packs per month.

The company is considering producing a seasonal beer that will be sold in October, November, and December. The company estimates that at $6 per six-pack, the company will sell 1,400 six-packs. At $7 per six-pack, sales will be 700 six-packs. The company also estimates that sales of the seasonal beer will eat into sales of its standard items. Specifically, for every 700 six-packs of the seasonal beer that are sold, 210 six-packs of the standard varieties will not be sold. The variable production costs of all beers is $1.70 per six-pack.

Partially correct answer iconYour answer is partially correct.

Calculate the incremental profit associated with the two selling prices under consideration for the seasonal beer (i.e., $6 and $7 per six-pack). (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		$6 per six-pack		$7 per six-pack
Incremental profit/(loss)		$4214		$2597 - This was wrong.

Should Dynatech Brewing produce the beer? Yes, they should.

What price should the company charge? $6

I have gotten most components of this correct but I am missing something with the Incremental profit/loss part. I got $2597 for the $7 per six-pack & it is stating it is wrong. Please show your work so I can see where I missed a step here.

I did:

6-1.70=$4.3

4.3X1400=6020

4.3X420= 1806

6020-1806= 4214 (This part was correct)

7-1.70= 5.3

5.3X700= 3710

5.3x210=1113

3710-1113=2597 (This was wrong, what am I missing?)

Answer 1