Question

Michael Reeves, an ice cream vendor, pays $17.50 for a five-gallon container of premium ice cream. From this quantity he sells 80 scoops at $0.90 per scoop. If he sold smaller scoops, he could sell 98 scoops from the same container; however, he could charge only $0.80 per scoop. If Michael switches to the smaller scoops, by how much will his profit per container go up or down? (Profit = Sales – Expenses)

Using your answer from the questions above, by what percent will the profit change? (Round to the nearest tenth of a percent.)

Answer 1

cost = $17.50

@80 scoops => 80*($0.90)=$72 revenue
$72-$17.50=$54.50 profit

@98 scoops => 98*($0.80)=$78.40 revenue
$78.40-$17.50 = $60.90 profit

$60.90 - $54.50 = $6.40
profit went up by $6.40

$60.90/$54.50=1.1174
profit went up by 11.74%