Blinko estimates its average total cost be about $3 per hamburger when it sells 80 hamburgers a day. It estimates that it can sell a

Blinko estimates its average total cost be about $3 per hamburger when it sells 80 hamburgers a day. It estimates that it can sell a maximum of 100 hamburgers a day. It would like to earn a 10% return a day on its $200 in total investment in hamburger sales each day (counting pro-rated overhead costs) at the average sales level of 80 hamburgers a day. If Blinko uses cost-plus pricing what price should it set? Can it be sure of selling 100 hamburgers a day at this price? Assuming that Blinko wants to maximize its returns on hamburger sales, what are the arguments for and against using cost-plus pricing to do this?

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