Dairy Days Ice Cream Sells Ice Cream Cones for $4

question 82

Multiple Choice

Dairy Days Ice Cream sells ice cream cones for $4 per customer.Variable costs are $3 per cone.Fixed costs are $2,500 per month.What is Dairy Days' contribution margin per ice cream cone?

• A)$1.00
• B)$3.00
• C)$0.25
• D)$4.00

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Definitions:

Profit

The financial gain made in a transaction or business operation, calculated as the difference between revenue and costs.

Positive Profits

When a company's total revenue exceeds its total costs, resulting in a financial gain.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified time period.

Profit-Maximizing

A strategy or point at which a business makes the highest profit possible, given its production costs and market demand.