Drill 29 ·
AP Business with Personal Finance: Mixed Marketing and Finance Drill 29 is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.
A cross-unit drill in which a food-truck owner's pricing choice drives profit and household income; it uses an invented company and original figures.
Dana Forsythe runs Dunmere Street Kitchen, a one-person food truck, as a sole proprietor. For this simplified comparison, the truck's monthly profit is treated as the household income available for the month. Each bowl costs 4 dollars in ingredients and supplies to make (the variable cost). The owner is choosing between two prices for a bowl and has estimated how many bowls would sell each month at each price. Fixed costs (the truck permit and parking) are 2,000 dollars per month at either price.
Dunmere Street Kitchen: Two Pricing Options (one month)
| Item | Option 1: price 9 dollars | Option 2: price 12 dollars |
|---|---|---|
| Price per bowl | 9 | 12 |
| Variable cost per bowl | 4 | 4 |
| Bowls sold per month | 1,000 | 700 |
| Fixed costs per month | 2,000 | 2,000 |