Maintain profit margin with new product line
Company: Capital One
Role: Data Scientist
Category: Statistics & Math
Difficulty: medium
Interview Round: Technical Screen
Assume m = million. In Year 2 you add Vegan with fixed costs: training $60m/year and supplier $2.25m/month. Maintain prices/costs from earlier (Regular: $4 price, $1 cost; Vegan: $4 price, $2 cost) and mix Vegan:Regular = 2:3. What total number of burgers must you sell in Year 2 to keep the same profit margin as Year 1 (from the previous question)? Provide the general formula and the numeric answer.
Quick Answer: This question evaluates competence in cost-volume-profit analysis, algebraic modeling of profit margins, and unit economics when adding a new product line.
