Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

17 5 points Sipood Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season

image text in transcribed
image text in transcribed
17 5 points Sipood Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season and the business is heavily dependent on the weather and the economy in addition to new competition Sanjana Sweet, the owner, prepares a budget each year after reading long-term weather forecasts and estimates of summer tourism. The budget is a first step in planning whether she will need any loans and whether she needs to consider adjustments to store staffing. Based on expertise and experience, she develops the following Cross Margin per Customer (Delco - cost of Number o scenario Goods) Custom dood 48.000 5.0 35,000 POOL 1. 33,000 Ya morences Sanjana assumes, for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $48,000 plus $2 for every customer in excess of 38,000. The marketing and administrative costs are estimated to be $13,500 plus 3 percent of the gross margin 17 Good Yair POO 5. 48,000 30,000 33,000 5 points Skipped Sanjana assumes, for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $48,000 plus $2 for every customer in excess of 38,000. The marketing and administrative costs are estimated to be $13,500 plus 3 percent of the gross margin. Required: Prepare an analysis of the possible operating Income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes? Operating Costs Marketing & Admin Operating Profit (Loss) $ 0 $ 0 S Gross Margin 5 19 5 58 $ 60 $ 19 $ 58 $ 68 $ 19 $ S Number of Customers Gross Margin 33.000 33.000 33.000 38.000 38.000 38.000 48.000 48000 48000 Poor (Ear Good ( Poor Fair Good Poor Fair Good a 0 5 $ $ 0 0 0 0 S $ $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Non Specialists

Authors: Catherine Gowthorpe

2nd Edition

1844802051, 978-1844802050

More Books

Students also viewed these Accounting questions