Question
In: Finance
Company A sells paper coffee cups to all Doutor Coffee locations in Japan. Company B sells...
Company A sells paper coffee cups to all Doutor Coffee
locations in Japan. Company B sells dinner plates to all Saizeryia
restaurants in Japan. Company A charges $1 for a pack of 100 cups
and Company B charges $3 for 1 dinner plate. Tell us exactly what
information you would need to determine whether Company A or
Company B has higher annual revenue and explain how you would
calculate these two figures.
Solutions
Expert Solution
The number of cup packs sold by company A and number of dinner plates sold by company is required information to calculate revenues of these two company.
Annual revenue can be calculated by multipying number of units sold in a year by selling price.
Example : if cups packs sold in a year are 500 then annual revenue would be 500 x 1 = $500
Annual revenue = Number of units sold x Selling price per unit.
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