{"id":11107,"date":"2017-04-04T21:36:15","date_gmt":"2017-04-04T21:36:15","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&#038;p=11107"},"modified":"2017-10-26T21:48:47","modified_gmt":"2017-10-26T21:48:47","slug":"assignment-claires-cuttery","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/chapter\/assignment-claires-cuttery\/","title":{"raw":"Assignment: Claire\u2019s Cuttery","rendered":"Assignment: Claire\u2019s Cuttery"},"content":{"raw":"<h2><strong>Your Task <\/strong><\/h2>\r\nUsing the information provided below, answer the series of questions presented in Part I and Part II, below. When preparing your written submission, include both your calculations and your written analysis of the financial information.\u00a0<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WMBusiness\/Claires+Income+Statement+STUDENT.xlsx\" target=\"_blank\" rel=\"noopener\">Click this link to download Claire's Income Statement<\/a>, which you'll need to complete this assignment.\r\n<div class=\"textbox shaded\">\r\n<h3>Claire\u2019s Cuttery<\/h3>\r\nClaire has always loved working with hair and beauty products and has decided that she will quit her day job and use the money her grandfather left her to start a salon. All of her friends think it\u2019s a great idea, but her brother cautions her about \u201cleaping before she looks.\u201d She decides that, before she begins, she will project her sales for the first year to prove to her family that she has a winning idea.\r\n\r\nShe sits down with paper and pencil and completes the expense part of the Income Statement shown in the file \u201cClaire\u2019s Income Statement.\u201d But she needs help projecting her sales, so using the following assumptions and information, complete the <strong>\u201cIncome\u201d section<\/strong> of the Income Statement for her.\r\n<h4><strong>PART 1: Year 1 Projections<\/strong><\/h4>\r\n<strong>Her Business <\/strong>\r\n\r\nClaire will have 3 stylists available. For planning purposes, she assumes the following:\r\n<ul>\r\n \t<li>Each stylist can accommodate 6 customers per day. The stylists each work 20 days per month.<\/li>\r\n \t<li>Claire also acts as a stylist, but she can only accommodate 4 customers per day since she also serves as receptionist. However, since it is her business, she works 6 days per week (24 days per month).<\/li>\r\n \t<li>She has estimated, on average, that each customer will generate $12.00 in revenue.<\/li>\r\n \t<li>She estimates that based on her research, it will cost her about $2.50 in supplies per customer\/per cut.<\/li>\r\n \t<li>She will operate January through December and close the month of February for a vacation at her favorite ski resort.<\/li>\r\n<\/ul>\r\n<strong>Market Share<\/strong>\r\n\r\nThere are 8 other salons in the area that will compete for business. Claire has talked to the local Chamber, and they estimate that about 15,000 people now live in her town. She assumes that she can capture about 24% of the market.\r\n\r\n<strong>Sales Projections for Year 1 <\/strong>\r\n\r\nShe assumes that the sales volume will be distributed as follows:\r\n<ul>\r\n \t<li>January: 5% of annual sales<\/li>\r\n \t<li>February: CLOSED<\/li>\r\n \t<li>March: 10% of annual sales<\/li>\r\n \t<li>April: 10% of annual sales<\/li>\r\n \t<li>May: 10% of annual sales<\/li>\r\n \t<li>June: 20% of annual sales<\/li>\r\n \t<li>July: 5% of annual sales<\/li>\r\n \t<li>August: 5% of annual sales<\/li>\r\n \t<li>September: 10% of annual sales<\/li>\r\n \t<li>October: 10% of annual sales<\/li>\r\n \t<li>November: 5% of annual sales<\/li>\r\n \t<li>December: 10% of annual sales<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h3><strong>Part I: Questions<\/strong><\/h3>\r\n<ol>\r\n \t<li>What is the maximum number of customers Claire can take in any one month based on her assumptions, and assuming a 30-day month? Is this enough to meet her market and sales projections, or does she have to reduce the sales projections because she runs out of capacity?<\/li>\r\n \t<li>Can Claire accommodate 20% of her annual sales in one month (June), given that she has only 3 stylists available? How should she address this?<\/li>\r\n \t<li>Will she show a profit or a loss for the business if she achieves her sales figures as projected?<\/li>\r\n<\/ol>\r\n<div class=\"textbox shaded\">\r\n<h3>Part<strong> II:<\/strong> REVISED Year 1 Projections<\/h3>\r\nGood news for Claire! Four local competitors don\u2019t reopen in December, and Claire gets 34% (rather than the projected 24%) of the market.\u00a0She believes that she will be able to reach her goals if she makes the following changes:\r\n<ul>\r\n \t<li>Each stylist will accommodate 1 additional customer per day if she extends her salon hours.<\/li>\r\n \t<li>Claire now serves 5 customers per day, instead of 4.<\/li>\r\n<\/ul>\r\nWith this increased market share, she has adjusted her operating expenses to include the following changes:\r\n<ul>\r\n \t<li>The landlord levies a new common area maintenance fee of that will increase her rent by $75.00 per month.<\/li>\r\n \t<li>She hires a receptionist for $400 per month to free up her time.<\/li>\r\n \t<li>Her utilities costs increase because of the extended hours.<\/li>\r\n<\/ul>\r\nShe needs you to adjust her sales projections and produce a new income statement for the year. (Use the \u201cREVISED Year 1\u201d worksheet that has been provided in the file you downloaded above.)<strong>\u00a0<\/strong>\r\n\r\n<\/div>\r\n<h3>Part II: Questions<\/h3>\r\n<ol>\r\n \t<li>Will Claire be able to meet the revised sales projections? If not, what do you think she should do?<\/li>\r\n \t<li>Under her current structure, will Claire be able to meet the demand for her services? If not, how can she address this?<\/li>\r\n \t<li>Will she show a profit or a loss for the business if she achieves her sales figures as projected?<\/li>\r\n<\/ol>","rendered":"<h2><strong>Your Task <\/strong><\/h2>\n<p>Using the information provided below, answer the series of questions presented in Part I and Part II, below. When preparing your written submission, include both your calculations and your written analysis of the financial information.\u00a0<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WMBusiness\/Claires+Income+Statement+STUDENT.xlsx\" target=\"_blank\" rel=\"noopener\">Click this link to download Claire&#8217;s Income Statement<\/a>, which you&#8217;ll need to complete this assignment.<\/p>\n<div class=\"textbox shaded\">\n<h3>Claire\u2019s Cuttery<\/h3>\n<p>Claire has always loved working with hair and beauty products and has decided that she will quit her day job and use the money her grandfather left her to start a salon. All of her friends think it\u2019s a great idea, but her brother cautions her about \u201cleaping before she looks.\u201d She decides that, before she begins, she will project her sales for the first year to prove to her family that she has a winning idea.<\/p>\n<p>She sits down with paper and pencil and completes the expense part of the Income Statement shown in the file \u201cClaire\u2019s Income Statement.\u201d But she needs help projecting her sales, so using the following assumptions and information, complete the <strong>\u201cIncome\u201d section<\/strong> of the Income Statement for her.<\/p>\n<h4><strong>PART 1: Year 1 Projections<\/strong><\/h4>\n<p><strong>Her Business <\/strong><\/p>\n<p>Claire will have 3 stylists available. For planning purposes, she assumes the following:<\/p>\n<ul>\n<li>Each stylist can accommodate 6 customers per day. The stylists each work 20 days per month.<\/li>\n<li>Claire also acts as a stylist, but she can only accommodate 4 customers per day since she also serves as receptionist. However, since it is her business, she works 6 days per week (24 days per month).<\/li>\n<li>She has estimated, on average, that each customer will generate $12.00 in revenue.<\/li>\n<li>She estimates that based on her research, it will cost her about $2.50 in supplies per customer\/per cut.<\/li>\n<li>She will operate January through December and close the month of February for a vacation at her favorite ski resort.<\/li>\n<\/ul>\n<p><strong>Market Share<\/strong><\/p>\n<p>There are 8 other salons in the area that will compete for business. Claire has talked to the local Chamber, and they estimate that about 15,000 people now live in her town. She assumes that she can capture about 24% of the market.<\/p>\n<p><strong>Sales Projections for Year 1 <\/strong><\/p>\n<p>She assumes that the sales volume will be distributed as follows:<\/p>\n<ul>\n<li>January: 5% of annual sales<\/li>\n<li>February: CLOSED<\/li>\n<li>March: 10% of annual sales<\/li>\n<li>April: 10% of annual sales<\/li>\n<li>May: 10% of annual sales<\/li>\n<li>June: 20% of annual sales<\/li>\n<li>July: 5% of annual sales<\/li>\n<li>August: 5% of annual sales<\/li>\n<li>September: 10% of annual sales<\/li>\n<li>October: 10% of annual sales<\/li>\n<li>November: 5% of annual sales<\/li>\n<li>December: 10% of annual sales<\/li>\n<\/ul>\n<\/div>\n<h3><strong>Part I: Questions<\/strong><\/h3>\n<ol>\n<li>What is the maximum number of customers Claire can take in any one month based on her assumptions, and assuming a 30-day month? Is this enough to meet her market and sales projections, or does she have to reduce the sales projections because she runs out of capacity?<\/li>\n<li>Can Claire accommodate 20% of her annual sales in one month (June), given that she has only 3 stylists available? How should she address this?<\/li>\n<li>Will she show a profit or a loss for the business if she achieves her sales figures as projected?<\/li>\n<\/ol>\n<div class=\"textbox shaded\">\n<h3>Part<strong> II:<\/strong> REVISED Year 1 Projections<\/h3>\n<p>Good news for Claire! Four local competitors don\u2019t reopen in December, and Claire gets 34% (rather than the projected 24%) of the market.\u00a0She believes that she will be able to reach her goals if she makes the following changes:<\/p>\n<ul>\n<li>Each stylist will accommodate 1 additional customer per day if she extends her salon hours.<\/li>\n<li>Claire now serves 5 customers per day, instead of 4.<\/li>\n<\/ul>\n<p>With this increased market share, she has adjusted her operating expenses to include the following changes:<\/p>\n<ul>\n<li>The landlord levies a new common area maintenance fee of that will increase her rent by $75.00 per month.<\/li>\n<li>She hires a receptionist for $400 per month to free up her time.<\/li>\n<li>Her utilities costs increase because of the extended hours.<\/li>\n<\/ul>\n<p>She needs you to adjust her sales projections and produce a new income statement for the year. (Use the \u201cREVISED Year 1\u201d worksheet that has been provided in the file you downloaded above.)<strong>\u00a0<\/strong><\/p>\n<\/div>\n<h3>Part II: Questions<\/h3>\n<ol>\n<li>Will Claire be able to meet the revised sales projections? If not, what do you think she should do?<\/li>\n<li>Under her current structure, will Claire be able to meet the demand for her services? If not, how can she address this?<\/li>\n<li>Will she show a profit or a loss for the business if she achieves her sales figures as projected?<\/li>\n<\/ol>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-11107\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Assignment: Claire&#039;s Cuttery. <strong>Authored by<\/strong>: Linda Williams and Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":26,"menu_order":16,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Assignment: Claire\\'s Cuttery\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"56c1a5f0-5b80-45df-9c6a-bef60cb4a6f3","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-11107","chapter","type-chapter","status-publish","hentry"],"part":94,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapters\/11107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/wp\/v2\/users\/26"}],"version-history":[{"count":7,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapters\/11107\/revisions"}],"predecessor-version":[{"id":11652,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapters\/11107\/revisions\/11652"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/parts\/94"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapters\/11107\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/wp\/v2\/media?parent=11107"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=11107"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/wp\/v2\/contributor?post=11107"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-wmopen-introbusiness\/wp-json\/wp\/v2\/license?post=11107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}