Bongos pizzas has a service guarantee that promises you, Ask an Expert

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Bongo's Pizzas has a service guarantee that promises you will not pay for your pizza if it is delivered more than 30 minutes from the order being placed. An investigation shows that 10% of all pizzas are delivered between 15 and 20 minutes from order, 40% between 20 and 25 minutes from order, 5% between 30 and 35 minutes from order, 3% between 35 and 40 minutes from order, and 2% over 40 minutes from order. The average profit on each pizza delivered on time is $1 and the average cost of each pizza delivered is $5.

Is the fact that Bongo's does not charge for 10% of its pizzas a significant problem for the business?
How much extra profit per pizza would be made if 5 minutes was cut from all deliveries?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91751339

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