In 1994, Schumacher and his wife and their two daughters moved to Finland, Minnesota, to operate a bar and restaurant called the Trestle Inn

In 1994, Schumacher and his wife and their two daughters moved to Finland, Minnesota, to operate a bar and restaurant called the Trestle Inn, which was owned by his parents. Schumacher claims that his parents induced him to leave his previous job and to make the move by orally agreeing to provide him a job managing the inn for life and to leave the business and a large parcel of land to him when his first parent died. Schumacher was given free reign in managing the inn and was allowed to retain all profits of the business but was not given any salary or wage. While he was operating the inn, Schumacher used his own funds to build a home for his family on his parents’ land, install a well, buy equipment for the business, and develop various marketing tools for the business. In the fall of 1998, Schumacher suspected that his parents were about to sell the inn and the adjoining property. He brought suit for a restraining order to prevent them from doing so, claiming breach of contract and unjust enrichment, among other claims. In October 1998, the parents notified Schumacher that his employment at the inn and his right to possess the adjoining property were terminated. The parents moved for summary judgment. The trial court held that Schumacher’s oral contract claim was invalid because the contract needed to be in writing under applicable Minnesota law. However, does Schumacher have a valid claim for unjust enrichment?

Click here for the solution: In 1994, Schumacher and his wife and their two daughters moved to Finland, Minnesota, to operate a bar and restaurant called the Trestle Inn

Herschel Candy Co. produces a single product: chocolate almond bar that sells for $0.40 per bar

Herschel Candy Co. produces a single product: chocolate almond bar that sells for $0.40 per bar. Variable costs for each bar (sugar, chocolate, almonds, wrapper and labor) total $0.25. Total Mo. Fixed costs are $60,000. Last month, bar sales reached 1 million. Herschel's President wants to increase company's profitability by following options:
1) increase advertising
2) Increase quality of bar's ingredients and simultaneously increase selling price
3) Increase selling price with no change in ingredients

a) Sales mgr. is confident intensive advertising campaign will double sales volume. If co.'s president goal is to increase this month's profits by 50% over last month's, what is max. amt. that can be spent on advertising that doubles sales volume?
b) Assume company increases quality of ingredients, thus increasing variable costs to $.30 per bar. By how much must selling price per unit be increased to maintain same breakeven point in units?
c) Assume next that company has decided to increase its selling price to $0.50 per bar with no change in advertising or ingredients. Compute sales volume in units that would be needed at new price for company to earn same profit as it earned last month.

Click here for the solution: Herschel Candy Co. produces a single product: chocolate almond bar that sells for $0.40 per bar