Question

Leo's Fruit Stand has always stocked just one brand of apples: Gala. Gala apples cost Leo $0.15 each, and he sells them for $0.52. Leo is considering adding Rome apples to his stand. They will cost him $0.21 each and he plans to sell them for $0.75 each. Leo expects Rome apple volume to be half of Gala's previous volume of 2,900 per month. He also expects 72% of Rome volume to be taken from Gala volume.

What share of total apple (unit) sales will the Rome apples represent for Leo following its introduction?

Answer 1

The share of total apple (unit) sales that Rome apples will represent for Leo following its introduction is 33.33%.

Step-by-step explanation:

Leo can calculate the share of total apple sales that Rome apples will represent by considering their expected volume and the percentage of volume taken from Gala apples. First, Leo needs to calculate the expected volume of Rome apples by dividing Gala's previous volume of 2,900 by 2, since Rome's volume is expected to be half of Gala's. That gives us an expected volume of 1,450 Rome apples per month.

Next, Leo needs to calculate the volume of Rome apples taken from Gala apples. Since 72% of Rome volume is taken from Gala volume, Leo multiplies the expected volume of Rome apples by 0.72 to get the volume taken from Gala apples. This gives us a volume of 1,044 Gala apples.

To calculate the share of total apple sales represented by Rome apples, we need to add the volumes of Rome and Gala apples and divide the volume of Rome apples by the total volume. The total volume is the sum of Rome's expected volume and Gala's previous volume, which is 2,900 apples + 1,450 apples = 4,350 apples. Therefore, the share of total apple sales represented by Rome apples is: (1,450 apples / 4,350 apples) * 100% = 33.33%.