Existing businesses are often sold when the owner wants to retire, relocate, or simply change fields. Peruse your local newspaper or an online resource such as craigslist classifieds for businesses being offered for sale in your area and choose one that you would be interested in purchasing. Your choice should be an existing business that is already in operation as opposed to a franchise or start-up business opportunity.

Required:

1. Write a brief summary of the business, its product(s) or service(s), and why you are interested in this particular company. Include a photocopy or printout of the original advertisement.

2. Make a list of the costs you expect in order to operate your new company. Separate these costs into product costs (materials, labor, and overhead) and period costs.

3. Describe the process you will use to determine the price you charge for products or services.

4. Consider the costs you identified as overhead in requirement 3 above. Group these overhead costs into pools and choose an activity driver for each pool. Explain the rationale behind your pools and the drivers chosen. How will this help you price the products or services that your business provides?

5. List 5 ways that this ABC system might help you evaluate and improve the performance or profitability of your company.