Question

You are planning a promotion that will feature a lunch special. the lunch special will feature a loss leader of a small order of french fries for $0.50 when the customer purchases a hamburger and soda at the same time. the normal retail price of the small french fries is $ 0.99. your cost for the fries is $0.50. how much margin is being lost if you sell 35 of the lunch specials?

Answer 1

To find the margin being lost, you take the difference between the normal retail price of the item and subtract it from the item cost to you. After that is done, multiply the difference by the amount of items sold at that price.

(0.99 - 0.50) = 0.49
(0.49)(35) = $17.15 is being lost