Question

Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give discounts for people who order two dozen cookies, three dozen cookies or more? If so, how much? Will it take you any longer to fill a two-dozen cookie order than a one-dozen cookie order?
Will this be ok with everyone else?

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The variable costs of each dozen cookies would be the same if you order one dozen or 10. It would consist of $.60 for ingredients per dozen, the $.10 per box for each dozen, and $1.00 for dough per dozen. The labor time for one dozen would be 12 minutes, for two dozen it would require 17 minutes, and for three dozen it would require 22 minutes of labor. Therefore we should offer a discount on each additional dozen ordered since the additional dozen only takes 5 minutes of labor...

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