WHAT PRODUCT TO SELL ACTIVITY SHEET
PURPOSE:
You and your partner have been hired by the managers of Eagles Nest to help
determine which of three new products should be introduced to the product mix of the
store. Due to the size of the store, only one of the three products can be added. Your
job is to determine which product would be most profitable and thus added to the
product mix.
Potential Operating Cost of Product / Selling Price
Products Expenses Unit
Jumbo Pretzels ($30.00) $1.25 $1.75
Pizza Burritos ($55.00) $0.80 $1.25
Quarter Pounders ($80.00) $0.55 $0.90
STEPS FOR EVALUATING EACH PRODUCT:
1) Identify the variables and constants.
2) Construct 2 linear equations in the form y = mx + b
a. Total Expenses (y1)
b. Total Income (y2)
3) Identify your break even points for each product, algebraically.
4) Graph your two equations. Show the number of units and profit for the break-
even point. Identify the area of loss, and profit.
SOLVE
1) For each product, what would be your profit / loss assuming there were 210 units
sold?
2) For each product, what would be your profit / loss assuming there were 60 units
sold?
a. illustrate this information on your graphs
3) Predict what would happen to your break even point on pizza burritos of your
operating costs in Year 2 were to drop to $45 and your selling price were to
decrease to $0.75.
4) Which product would you recommend? Why?
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