Question

Jan Green plans to sell blueberry pies at a local farmer's market. The permit and space rental will cost her $2,200 for the June through August season. She expects to have an average variable cost of $2.15 per pie and expects to sell 900 pies per month. Betty also expects all other fixed costs to be $3,000 for the entire season. If she wants to realize a $12,000 profit, how much should she sell each pie for? Assume no sales tax (round to the nearest penny and enter answer like this $9.46)

Answer 1

Total fixed cost:
Permit and space rental cost			2200
Other fixed ccost			3000
Total fixed cost			5200
Total Desired contribution:
Total fixed cost			5200
Desired profits			12000
Total desired contribution			17200
Divide: Number of unist			900
Desired contribution per unit			19.11111
Selling price per unit:
Variable cost per unit			2.15
Desired contribution per unit			19.11
Selling price per unit:			21.26
Selling price per pie shall be $ 21.26