Question

Sammie's Pizza solo an average of 150 pizzas per week, of which 20% are single-topping pizzas and 80% are supreme pizzas with multiple toppings Singles sell for 58 each and incur variable costs of 52 Supremes sell for $12 each and incur Valable costs of $6 Which pizza should Sammie's Pizza promote to maximize profits? OA Singles because they have the highest contributie margin ratio OB. Singles because they contribute the highest total contribution margin OC Supremes because they have the highest contribution margin ratio OD. Both should be promoted equally because they have the same contribution margin per unit

Answer 1

D. both should be promoted equally because they have the same contribution margin per unit

Analysis:-

Contribution margin(CM) = selling price - variable cost

• CM of singles = 8 - 2 = $6
• CM of supremes = 12 - 6 = $6