{"id":10971,"date":"2017-03-26T23:37:38","date_gmt":"2017-03-26T23:37:38","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&p=10971"},"modified":"2024-05-07T16:46:32","modified_gmt":"2024-05-07T16:46:32","slug":"salty-pawz-financial-information","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-introductiontobusiness\/chapter\/salty-pawz-financial-information\/","title":{"raw":"Salty Pawz Financial Information","rendered":"Salty Pawz Financial Information"},"content":{"raw":"
\r\n

Sales + Revenue<\/h2>\r\nFor the last six months, Wanda\u2019s sales have broken down as shown below. She has also provided you with her cost for each variety of treat.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Sales and Revenue Breakdown<\/caption>\r\n
Product<\/th>\r\n% of Sales<\/th>\r\nSales Price<\/th>\r\nCOGS<\/th>\r\nContribution<\/th>\r\nProfit Margin<\/th>\r\nWeighted Profit Margin<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Party Pooch<\/th>\r\n45%<\/td>\r\n$20.00<\/td>\r\n$10.40<\/td>\r\n$9.60<\/td>\r\n48.00%<\/td>\r\n21.60%<\/td>\r\n<\/tr>\r\n
Chicken Cuties<\/th>\r\n18%<\/td>\r\n$15.00<\/td>\r\n$7.80<\/td>\r\n$7.20<\/td>\r\n48.00%<\/td>\r\n8.64%<\/td>\r\n<\/tr>\r\n
Bison Bites<\/th>\r\n5%<\/td>\r\n$21.00<\/td>\r\n$10.80<\/td>\r\n$10.20<\/td>\r\n48.57%<\/td>\r\n2.43%<\/td>\r\n<\/tr>\r\n
Lamb Lovies<\/th>\r\n32%<\/td>\r\n$24.00<\/td>\r\n$12.60<\/td>\r\n$11.40<\/td>\r\n47.50%<\/td>\r\n15.20%<\/td>\r\n<\/tr>\r\n
Total Sales %\r\n(Must equal 100%)<\/strong><\/th>\r\n100%<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\nAverage\r\nProfit Margin<\/strong><\/th>\r\n47.87%<\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Cost of Goods Sold<\/h2>\r\nWanda\u2019s COGS include the packaging, labeling, the ingredients, and the time it takes to make the treats. Since she can bake them in big batches, her labor cost per unit is very low.\r\n\r\nWhen Wanda ships her products, she charges just what it costs her. Shipping is done on a cost recovery basis and currently she doesn\u2019t consider it in her income\/expenses.\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Price and Cost of Goods Sold by Unit<\/caption>\r\n
Product Unit<\/th>\r\nSales Price<\/th>\r\nCOGS<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Chicken Cuties<\/th>\r\n$1.25<\/td>\r\n$0.65<\/td>\r\n<\/tr>\r\n
Bison Bites<\/th>\r\n$1.75<\/td>\r\n$0.90<\/td>\r\n<\/tr>\r\n
Lamb Lovies<\/th>\r\n$2.00<\/td>\r\n$1.05<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Monthly Expenses<\/h2>\r\nCurrently Wanda\u2019s monthly expenses are:\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Salty Paws Monthly Expenses<\/caption>\r\n
Expense<\/th>\r\nAmount<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Rent<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Electricity<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Telephone<\/td>\r\n$100.00<\/td>\r\n<\/tr>\r\n
Water\/Sewer<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Internet<\/td>\r\n$60.00<\/td>\r\n<\/tr>\r\n
Website<\/td>\r\n$175.00<\/td>\r\n<\/tr>\r\n
Salaries<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Owner\u2019s Draw<\/td>\r\n$1000.00<\/td>\r\n<\/tr>\r\n
Office Supplies<\/td>\r\n$50.00<\/td>\r\n<\/tr>\r\n
Loan Payment<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Insurance<\/td>\r\n$85.00<\/td>\r\n<\/tr>\r\n
Other<\/td>\r\n$0.00<\/td>\r\n<\/tr>\r\n
Total Overhead<\/th>\r\n$1,470.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Sales Mix<\/h2>\r\nCurrently Wanda\u2019s customers purchase her products at the following ratios:\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Product Purchase Ratios<\/caption>\r\n
Product<\/th>\r\n% of Sales<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Party Pooch<\/td>\r\n45%<\/td>\r\n<\/tr>\r\n
Chicken Cuties<\/td>\r\n18%<\/td>\r\n<\/tr>\r\n
Bison Bites<\/td>\r\n5%<\/td>\r\n<\/tr>\r\n
Lamb Lovies<\/td>\r\n32%<\/td>\r\n<\/tr>\r\n
Total % of Sales<\/th>\r\n100%<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Break Even Calculation<\/h2>\r\nAverage Sales per customer: $20.00\r\nTotal overhead (as in table above): $1,470.00\r\nAverage profit margin (as in table above): 47.87%\r\n<\/span>\r\n\r\nBREAKEVEN =\u00a0Total Overhead divided by\u00a0Average Profit Margin\r\n\r\n[latex]\r\n\\begin{align*}\r\n\\text{Salty Paws Breakeven} &= \\dfrac{$1,470.00}{47.87\\%} \\\\ \\\\\r\n&= \\dfrac{$1,470.00}{\\dfrac{47.87}{100}} \\\\\\\\\r\n&= \\dfrac{$1,470.00}{47.87} X 100 \\\\\\\\\r\n& =$3,070.91\r\n\\end{align*}\r\n[\/latex]\r\n\r\nBased on her current monthly expenses and sales mix, this is what Wanda has to sell in order to break-even:\r\n\r\n\r\n\r\n\r\n\r\n
Product Breakeven in Dollars and Units<\/caption>\r\n
\r\nBREAKEVEN<\/th>\r\nParty Pooch<\/th>\r\nChicken Cuties<\/th>\r\nBison Bites<\/th>\r\nLamb Lovies<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Monthly In Dollars<\/th>\r\n$3,070.91<\/td>\r\n$1,381.91<\/td>\r\n$552.76<\/td>\r\n$153.55<\/td>\r\n$982.69<\/td>\r\n<\/tr>\r\n
In Units<\/th>\r\n69<\/td>\r\n37<\/td>\r\n7<\/td>\r\n41<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Forecasting Supply and Demand<\/h2>\r\nWanda is at capacity for production out of her kitchen, so she believes that she is at the maximum income she can generate with her current structure. If Wanda changes her pricing structure, the following quantities demanded and quantities supplied will result.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Chicken Cuties\r\nResponse in Supply & Demand to Price Changes<\/caption>\r\n
Price ($)<\/strong><\/th>\r\nDemand (Q)<\/strong><\/th>\r\nSupply (Q)<\/strong><\/th>\r\n<\/tr>\r\n<\/thead>\r\n
$0.75<\/td>\r\n1000<\/td>\r\n500<\/td>\r\n<\/tr>\r\n
$1.00<\/td>\r\n900<\/td>\r\n650<\/td>\r\n<\/tr>\r\n
$1.25<\/td>\r\n800<\/td>\r\n800<\/td>\r\n<\/tr>\r\n
$1.50<\/td>\r\n700<\/td>\r\n1000<\/td>\r\n<\/tr>\r\n
$1.75<\/td>\r\n600<\/td>\r\n1400<\/td>\r\n<\/tr>\r\n
$2.00<\/td>\r\n500<\/td>\r\n1500<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Bison Bites\r\nResponse in Supply & Demand to Price Changes<\/caption>\r\n
Price ($)<\/th>\r\nDemand (Q)<\/th>\r\nSupply (Q)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
$1.00<\/td>\r\n1200<\/td>\r\n500<\/td>\r\n<\/tr>\r\n
$1.25<\/td>\r\n1100<\/td>\r\n600<\/td>\r\n<\/tr>\r\n
$1.50<\/td>\r\n900<\/td>\r\n700<\/td>\r\n<\/tr>\r\n
$1.75<\/td>\r\n800<\/td>\r\n900<\/td>\r\n<\/tr>\r\n
$2.00<\/td>\r\n700<\/td>\r\n1000<\/td>\r\n<\/tr>\r\n
$2.25<\/td>\r\n400<\/td>\r\n1400<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Lamb Lovies\r\nResponse in Supply & Demand to Price Changes<\/caption>\r\n
Price ($)<\/th>\r\nDemand (Q)<\/th>\r\nSupply (Q)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
$1.75<\/td>\r\n1500<\/td>\r\n800<\/td>\r\n<\/tr>\r\n
$2.00<\/td>\r\n1400<\/td>\r\n900<\/td>\r\n<\/tr>\r\n
$2.25<\/td>\r\n1200<\/td>\r\n1000<\/td>\r\n<\/tr>\r\n
$2.50<\/td>\r\n1000<\/td>\r\n1200<\/td>\r\n<\/tr>\r\n
$2.75<\/td>\r\n800<\/td>\r\n1400<\/td>\r\n<\/tr>\r\n
$3.00<\/td>\r\n700<\/td>\r\n1600<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Party Pooch\r\nResponse in Supply & Demand to Price Changes<\/caption>\r\n
Price ($)<\/th>\r\nDemand (Q)<\/th>\r\nSupply (Q)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
$16.00<\/td>\r\n1400<\/td>\r\n600<\/td>\r\n<\/tr>\r\n
$18.00<\/td>\r\n1200<\/td>\r\n700<\/td>\r\n<\/tr>\r\n
$20.00<\/td>\r\n1100<\/td>\r\n800<\/td>\r\n<\/tr>\r\n
$22.00<\/td>\r\n1000<\/td>\r\n1000<\/td>\r\n<\/tr>\r\n
$24.00<\/td>\r\n900<\/td>\r\n1200<\/td>\r\n<\/tr>\r\n
$26.00<\/td>\r\n800<\/td>\r\n1400<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Income Information<\/h2>\r\nHere is a summary of Wanda\u2019s Salty Pawz income information for the past 6 months.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Salty Paws 6 Month Income Statement<\/caption>\r\n
Income:<\/th>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Party Pooch<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a040,500.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Chicken Cuties<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a016,200.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Bison Bites<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,515.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Lamb Lovies<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a028,800.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Total Income<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090,015.00<\/td>\r\n<\/tr>\r\n
Cost of Good Sold:<\/th>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Party Pooch<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,060.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Chicken Cuties<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,424.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Bison Bites<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,515.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Canine Craving<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,120.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Total Cost of Sales<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a049,119.00<\/td>\r\n<\/tr>\r\n
GROSS PROFIT<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a040,896.00<\/td>\r\n<\/tr>\r\n
Operating Expenses:<\/th>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Rent<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Electricity<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Telephone<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0600.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Water \/Sewer<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Internet<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0360.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Website<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,050.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Salaries<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Owner\u2019s Draw<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,000.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Office Supplies<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0300.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Loan Payment<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Insurance<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0510.00<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Other<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0Total Expenses<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,820.00<\/td>\r\n<\/tr>\r\n
NET INCOME BEFORE TAXES<\/th>\r\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a032,076.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>","rendered":"
\n

Sales + Revenue<\/h2>\n

For the last six months, Wanda\u2019s sales have broken down as shown below. She has also provided you with her cost for each variety of treat.<\/p>\n\n\n\n\n\n\n\n\n\n
Sales and Revenue Breakdown<\/caption>\n
Product<\/th>\n% of Sales<\/th>\nSales Price<\/th>\nCOGS<\/th>\nContribution<\/th>\nProfit Margin<\/th>\nWeighted Profit Margin<\/th>\n<\/tr>\n<\/thead>\n
Party Pooch<\/th>\n45%<\/td>\n$20.00<\/td>\n$10.40<\/td>\n$9.60<\/td>\n48.00%<\/td>\n21.60%<\/td>\n<\/tr>\n
Chicken Cuties<\/th>\n18%<\/td>\n$15.00<\/td>\n$7.80<\/td>\n$7.20<\/td>\n48.00%<\/td>\n8.64%<\/td>\n<\/tr>\n
Bison Bites<\/th>\n5%<\/td>\n$21.00<\/td>\n$10.80<\/td>\n$10.20<\/td>\n48.57%<\/td>\n2.43%<\/td>\n<\/tr>\n
Lamb Lovies<\/th>\n32%<\/td>\n$24.00<\/td>\n$12.60<\/td>\n$11.40<\/td>\n47.50%<\/td>\n15.20%<\/td>\n<\/tr>\n
Total Sales %
\n(Must equal 100%)<\/strong><\/th>\n		100%<\/strong><\/td>\n<\/td>\n<\/td>\nAverage
\nProfit Margin<\/strong><\/th>\n		47.87%<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Cost of Goods Sold<\/h2>\n

Wanda\u2019s COGS include the packaging, labeling, the ingredients, and the time it takes to make the treats. Since she can bake them in big batches, her labor cost per unit is very low.<\/p>\n

When Wanda ships her products, she charges just what it costs her. Shipping is done on a cost recovery basis and currently she doesn\u2019t consider it in her income\/expenses.<\/p>\n\n\n\n\n\n\n\n
Price and Cost of Goods Sold by Unit<\/caption>\n
Product Unit<\/th>\nSales Price<\/th>\nCOGS<\/th>\n<\/tr>\n<\/thead>\n
Chicken Cuties<\/th>\n$1.25<\/td>\n$0.65<\/td>\n<\/tr>\n
Bison Bites<\/th>\n$1.75<\/td>\n$0.90<\/td>\n<\/tr>\n
Lamb Lovies<\/th>\n$2.00<\/td>\n$1.05<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Monthly Expenses<\/h2>\n

Currently Wanda\u2019s monthly expenses are:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Salty Paws Monthly Expenses<\/caption>\n
Expense<\/th>\nAmount<\/th>\n<\/tr>\n<\/thead>\n
Rent<\/td>\n$0.00<\/td>\n<\/tr>\n
Electricity<\/td>\n$0.00<\/td>\n<\/tr>\n
Telephone<\/td>\n$100.00<\/td>\n<\/tr>\n
Water\/Sewer<\/td>\n$0.00<\/td>\n<\/tr>\n
Internet<\/td>\n$60.00<\/td>\n<\/tr>\n
Website<\/td>\n$175.00<\/td>\n<\/tr>\n
Salaries<\/td>\n$0.00<\/td>\n<\/tr>\n
Owner\u2019s Draw<\/td>\n$1000.00<\/td>\n<\/tr>\n
Office Supplies<\/td>\n$50.00<\/td>\n<\/tr>\n
Loan Payment<\/td>\n$0.00<\/td>\n<\/tr>\n
Insurance<\/td>\n$85.00<\/td>\n<\/tr>\n
Other<\/td>\n$0.00<\/td>\n<\/tr>\n
Total Overhead<\/th>\n$1,470.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Sales Mix<\/h2>\n

Currently Wanda\u2019s customers purchase her products at the following ratios:<\/p>\n\n\n\n\n\n\n\n\n\n
Product Purchase Ratios<\/caption>\n
Product<\/th>\n% of Sales<\/th>\n<\/tr>\n<\/thead>\n
Party Pooch<\/td>\n45%<\/td>\n<\/tr>\n
Chicken Cuties<\/td>\n18%<\/td>\n<\/tr>\n
Bison Bites<\/td>\n5%<\/td>\n<\/tr>\n
Lamb Lovies<\/td>\n32%<\/td>\n<\/tr>\n
Total % of Sales<\/th>\n100%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Break Even Calculation<\/h2>\n

Average Sales per customer: $20.00
\nTotal overhead (as in table above): $1,470.00
\nAverage profit margin (as in table above): 47.87%
\n<\/span><\/p>\n

BREAKEVEN =\u00a0Total Overhead divided by\u00a0Average Profit Margin<\/p>\n

[latex]\\begin{align*} \\text{Salty Paws Breakeven} &= \\dfrac{$1,470.00}{47.87\\%} \\\\ \\\\ &= \\dfrac{$1,470.00}{\\dfrac{47.87}{100}} \\\\\\\\ &= \\dfrac{$1,470.00}{47.87} X 100 \\\\\\\\ & =$3,070.91 \\end{align*}[\/latex]<\/p>\n

Based on her current monthly expenses and sales mix, this is what Wanda has to sell in order to break-even:<\/p>\n\n\n\n\n\n\n
Product Breakeven in Dollars and Units<\/caption>\n
\n<\/td>\nBREAKEVEN<\/th>\nParty Pooch<\/th>\nChicken Cuties<\/th>\nBison Bites<\/th>\nLamb Lovies<\/th>\n<\/tr>\n<\/thead>\n
Monthly In Dollars<\/th>\n$3,070.91<\/td>\n$1,381.91<\/td>\n$552.76<\/td>\n$153.55<\/td>\n$982.69<\/td>\n<\/tr>\n
In Units<\/th>\n69<\/td>\n37<\/td>\n7<\/td>\n41<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Forecasting Supply and Demand<\/h2>\n

Wanda is at capacity for production out of her kitchen, so she believes that she is at the maximum income she can generate with her current structure. If Wanda changes her pricing structure, the following quantities demanded and quantities supplied will result.<\/p>\n\n\n\n\n\n\n\n\n\n\n
Chicken Cuties
\nResponse in Supply & Demand to Price Changes<\/caption>\n
Price ($)<\/strong><\/th>\nDemand (Q)<\/strong><\/th>\nSupply (Q)<\/strong><\/th>\n<\/tr>\n<\/thead>\n
$0.75<\/td>\n1000<\/td>\n500<\/td>\n<\/tr>\n
$1.00<\/td>\n900<\/td>\n650<\/td>\n<\/tr>\n
$1.25<\/td>\n800<\/td>\n800<\/td>\n<\/tr>\n
$1.50<\/td>\n700<\/td>\n1000<\/td>\n<\/tr>\n
$1.75<\/td>\n600<\/td>\n1400<\/td>\n<\/tr>\n
$2.00<\/td>\n500<\/td>\n1500<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n
Bison Bites
\nResponse in Supply & Demand to Price Changes<\/caption>\n
Price ($)<\/th>\nDemand (Q)<\/th>\nSupply (Q)<\/th>\n<\/tr>\n<\/thead>\n
$1.00<\/td>\n1200<\/td>\n500<\/td>\n<\/tr>\n
$1.25<\/td>\n1100<\/td>\n600<\/td>\n<\/tr>\n
$1.50<\/td>\n900<\/td>\n700<\/td>\n<\/tr>\n
$1.75<\/td>\n800<\/td>\n900<\/td>\n<\/tr>\n
$2.00<\/td>\n700<\/td>\n1000<\/td>\n<\/tr>\n
$2.25<\/td>\n400<\/td>\n1400<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n
Lamb Lovies
\nResponse in Supply & Demand to Price Changes<\/caption>\n
Price ($)<\/th>\nDemand (Q)<\/th>\nSupply (Q)<\/th>\n<\/tr>\n<\/thead>\n
$1.75<\/td>\n1500<\/td>\n800<\/td>\n<\/tr>\n
$2.00<\/td>\n1400<\/td>\n900<\/td>\n<\/tr>\n
$2.25<\/td>\n1200<\/td>\n1000<\/td>\n<\/tr>\n
$2.50<\/td>\n1000<\/td>\n1200<\/td>\n<\/tr>\n
$2.75<\/td>\n800<\/td>\n1400<\/td>\n<\/tr>\n
$3.00<\/td>\n700<\/td>\n1600<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n
Party Pooch
\nResponse in Supply & Demand to Price Changes<\/caption>\n
Price ($)<\/th>\nDemand (Q)<\/th>\nSupply (Q)<\/th>\n<\/tr>\n<\/thead>\n
$16.00<\/td>\n1400<\/td>\n600<\/td>\n<\/tr>\n
$18.00<\/td>\n1200<\/td>\n700<\/td>\n<\/tr>\n
$20.00<\/td>\n1100<\/td>\n800<\/td>\n<\/tr>\n
$22.00<\/td>\n1000<\/td>\n1000<\/td>\n<\/tr>\n
$24.00<\/td>\n900<\/td>\n1200<\/td>\n<\/tr>\n
$26.00<\/td>\n800<\/td>\n1400<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Income Information<\/h2>\n

Here is a summary of Wanda\u2019s Salty Pawz income information for the past 6 months.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Salty Paws 6 Month Income Statement<\/caption>\n
Income:<\/th>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Party Pooch<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a040,500.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Chicken Cuties<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a016,200.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Bison Bites<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,515.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Lamb Lovies<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a028,800.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Total Income<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090,015.00<\/td>\n<\/tr>\n
Cost of Good Sold:<\/th>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Party Pooch<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,060.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Chicken Cuties<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,424.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Bison Bites<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,515.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Canine Craving<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,120.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Total Cost of Sales<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a049,119.00<\/td>\n<\/tr>\n
GROSS PROFIT<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a040,896.00<\/td>\n<\/tr>\n
Operating Expenses:<\/th>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Rent<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Electricity<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Telephone<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0600.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Water \/Sewer<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Internet<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0360.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Website<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,050.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Salaries<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Owner\u2019s Draw<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,000.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Office Supplies<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0300.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Loan Payment<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Insurance<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0510.00<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Other<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u2013<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0Total Expenses<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,820.00<\/td>\n<\/tr>\n
NET INCOME BEFORE TAXES<\/th>\n$ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a032,076.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t
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Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Original<\/div>