Ola reviewed similar dog treat products on the market and determined a retail selling price to the..
Ola reviewed similar dog treat products on the market and determined a retail selling price to the final customer of $14.99 per package of 10 baked treats. This means she could sell to the retail stores for $9.99 per package, a margin for the pet stores of 50%. Ola calculated that the cost of the ingredients for one recipe that makes 50 treats is as follows: $2.95 for coconut flour, $0.85 for the unsweetened peanut butter, $1.72 for four organic eggs, $3.60 for the coconut oil, and $1.00 for the pumpkin puree. The cost of ingredients per package therefore would be one-fifth of these amounts. In addition to the cost of ingredients, the cost of packaging for one package would be $0.15 and the cost of shipping one package would be $1.50. Other costs associated with this business would be as follows: $1,000 for the legal costs of setting up the business, $2,200 per month rent, $250 per month for utilities not covered by the rental contract, $500 for the design of the packaging and $1,000 for the design of a simple web site (without e-commerce), and $1,500 for the cost of a commercial stove. For the first year, Ola is willing to work without getting paid (she can live off her savings) but she will have to hire one person to work at an annual salary of $30,000 (minimum wage). Task 1: Properly design a worksheet using an assumptions area and relative and absolute cell addressing where required, to calculate the contribution margin per package and the annual breakeven amount. Should any of the input values change, your properly designed worksheet should immediately recalculate the contribution margin and the breakeven amount. Task 2: What is the contribution margin? Task 3: What is the breakeven amount in units? Task 4: What impact will a 5% rise in the cost of coconut flour and coconut oil have on the breakeven amount? Q98; In the statement of cash flows, the significant non-cash activities section should show a significant non-cash activity for $ Apr 09 2022 01:31 PM
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