To keep her existing sales volume and take on the new convention center events, Nancy would need to hire additional employees who would "invade" her home while she and her family sleep. Hiring dependable night-shift workers would increase her variable product costs per unit by 20%. If she maintains her existing sales and takes on the new events under these circumstances, how much total operating income will she show for next year? Total operating income $
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- Susan's Kreations just completed its best year, generating income of $39,000 from selling decadent wedding cakes and desserts. For a business that is only two years old and run from Susan's own kitchen, this is quite an accomplishment. She has been asked to provide a special-event cake for one event per month at the local convention center, but at a reduced price of $410. While this is mostly fantastic news, Susan realizes that she is already working at maximum capacity. If she commits to these events, she will need to either find additional capacity or reduce her regular wedding cake sales. The following income statement shows Susan's results from last year. Sales COGS Gross margin Operating expenses Operating income $220,000 (a) 126,000 94,000 55.000 $39,000 Susan's average selling price is $1,000 per cake; fixed-MOH costs are $66,600 and are included in COGS. All other product costs vary based on volume. Average variable operating expenses are $109 per cake remaining operating…Kimberly's Kreations just completed its best year, generating income of $26,000 from selling decadent wedding cakes and desserts. For a business that is only two years old and run from Kimberly's own kitchen, this is quite an accomplishment. She has been asked to provide a special-event cake for one event per month at the local convention center, but at a reduced price of $450. While this is mostly fantastic news, Kimberly realizes that she is already working at maximum capacity. If she commits to these events, she will need to either find additional capacity or reduce her regular wedding cake sales. The following income statement shows Kimberly's results from last year. Sales COGS Gross margin Operating expenses Operating income (a) $190,000 113,000 77,000 Kimberly's average selling price is $1,000 per cake; fixed-MOH costs are $67,400 and are included in COGS. All other product costs vary based on volume. Average variable operating expenses are $100 per cake; remaining operating…Gloria is planning on opening a cake shop. She has found a location that rents for $15,550 per year and it will cost her another $13,716 to furnish the shop and purchase all the necessary equipment. She plans on charging $20 for a cake and it will cost her $3 per cake for ingredients and $1.92 per cake for decorations and $1.59 per cake for the beautiful, colorful to-go boxes. What is the dollar breakeven point she will need to earn to cover her costs in the first year? Round to the nearest whole number.
- Three years ago, Dorothy Taylor started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Dorothy sells the baskets for $33 each, and her variable costs are $23 per basket. She incurs $11,600 in fixed costs each year. (a) How many baskets will Dorothy have to sell this year if she wants to earn $28,000 in operating income? (Round answer to O decimal places, eg. 5,275) basketsAshley is a fresh graduate and is now planning to start a new business. She would run an online shop to sell snacks imported from Japan. She expects the annual purchase cost would be $380,000 and the annual sales would be $790,000. Four sets of computers are needed, which cost $7,000 each and could be sold at half price in the second-hand market after one year. She has to rent a small office, which costs her $19,000 per month. (i) Calculate the annual accounting profit of Ashely's snack business. (ii) Ashley will be involved in the daily operations of this snack business and has to give up the opportunity to get a full-time job. În consideration of annual economic profit, in what condition should Ashley start this business? Explain with relevant figures.A new restaurant has recently opened in your community and it is a huge success with an average of 520-540 customers daily. The owner has had to hire additional workers at $20 per hour to help with the dishwashing as each customer uses on average 5 dishes. The owner has investigated purchasing a large dishwashing machine which costs $260,000, but is uncertain as to whether it is worth it as this would be a huge expenditure for a new business owner and the purchase feels a bit daunting. The machine has an expected useful life of 10 years. The owner has hired you to determine whether the investment would be wise. Restaurant Facts 1. There are 3 restaurant shifts (breakfast, lunch, dinner) where each shift lasts 3 hours 2. On average, 900 dishes need washing per shift 3. The restaurant is open 360 days per year Market conditions: 1. Wages are expected to increase 1% each year 2. Interest rates are 8% 3. Interest is compounded quarterly Manual labor for dishwashing 1. For each of the 3…
- Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,780. The booth will be open 22 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $180 per package. She will continue to sell the existing product, EZRecords, which costs $94 per package. Ms. Ortega believes that the salesperson will spend approximately 12 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 78 units of EZRecords and 59 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 205 units of EZRecords and 110 units of ProOffice. Note: For all requirements, round "Cost per unit" to 2 decimal…Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,660. The booth will be open 26 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $190 per package. She will continue to sell the existing product, EZRecords, which costs $103 per package. Ms. Ortega believes that the salesperson will spend approximately 16 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 73 units of EZRecords and 59 units of ProOffice.Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $14,850. The booth will be open 33 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $180 per package. She will continue to sell the existing product, EZRecords, which costs $92 per package. Ms. Ortega believes that the salesperson will spend approximately 23 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 70 units of EZRecords and 46 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 192 units of EZRecords and 104 units of ProOffice. Note: For all requirements, round "Cost per unit" to 2 decimal…
- Now that Tracy has completed her first year in her business, she would like to expand to another location. She has looked at a property near Ft. Lee. She feels this is a prime location since she could provide cupcakes for events and office celebrations at Ft. Lee. She can purchase the property for $48,000 and believes she can build a building with all of the equipment for an additional $148,000. The estimated sales at the new location is $223,000 with a net operating income of $53,000. The minimum acceptable return for these types of investments is 23%. Tracy remembers studying return on investment and residual income from her college classes but needs you to do the calculations and explain what the numbers mean. A. explain residual income and return on investment on this new venture. B.Calculate both, explain your calculations, and if this will be a good investment for her. Your paper is to be at least one page.Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it hasbeen so popular with friends and others that she has decided to quit her job with an aerospace company andmanufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month.Staci will rent a small building near her home to use as a place for manufacturing the pottery. Therent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finishedpiece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell herpots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it willhandle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid acommission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a costof $300 per month.Staci has already paid the legal and filing fees…John Snow has recently retired, and he received a large lump sum settlement from his employer. He would like to invest this money to achieve a stable long term income. He is considering investing in the following two companies: Allied Grocers (AG) are a 3-year-old online grocery retailer that specializes in delivering a wide selection of quality food products through an online platform. Beta Solutions (BS) is an established 10-year-old electronics company that is known for selling the most innovative electronic products and software solutions. Selected financial data for 2019 AG BS Average total assets 1,500,000 4,000,000 Average # of common shares outstanding (no preferred shares) 10,000 10,000 Dividends paid 10,000 50,000 Current Market price per share $95 $165 Net sales 1,300,000 6,300,000 Cost of goods sold 900,000 4,200,000 Gross profit 400,000 2,100,000 Operating Expenses: Administrative…