Assume a local gluten-free pizzeria, on Harrison street, reported the following results for June and July Jul 2,500 2,900 Unit Sales Cost of Food Sold Wages and Salaries Rent Depreciation Utilities Supplies Total s 10,000 $ 10,600 3,700 4,000 2,000 2,000 500 1,500 580 18,100 $ 19,180 500 1,400 500 a. Identify each cost as being fixed, variable or mixed b. Determine the equation for total operating costs (Fixed + Unit Variable Cost . # of pizzas) c. Predict the total operating costs for d. Determine the average costs for 3500 pizzas 3500 pizzas Cruisin' with Lincoln Alumni After successfully eaming a MBA, Lincoln alumni decide to form their own cruise ship company based out of San Francisco. Lincoln Alumni cruises offers luxury trips along the Pacific Coast and to the Hawaiian Islands. They are debating what to do with their existing ship, S.S Mission Bay which was built 15 years ago for $90 M and is now fully depreciated. To replace the Mission Bay would cost $180M and its current market value is $150M. Lincoln Alumni Cruises' cost of capital is 15%. Lincoln Alumni, dusting off some accounting materials, were able to determine the operating costs for a two-week cruise to Alaska, which would be a change from a three week cruise from travelling down to Guatemala. Here are their estimates (based on 2,000 passengers per cruise and 25 cruises per year): PER CRUISE Variable Costs Fixed Costs Labor Food Fuel Port fees and services Marketing, ads, promotion 750,000 750,000 150,000 75,000 650,000 125,000 350,000 50,000 ,500,000 500,000 2,000,000 otals a. Assuming that the two-week Alaskan cruise will be priced at $2,000 per passenger, please calculate the break-even number of passengers per cruise based on the data above b. What do the Lincoln Alumni need to consider beyond these estimates, and if they included this consideration what would happen to the break-even point? Would there be an issue if the max capacity of the ship was 2000 passengers? HINT: Please calculate the OPPORTUNITY COST and compare against its capacity Name Sevall Surfware is a company that specializes in selling towels, swimsuits, and beach accessories The sales mix is 5:5:10 (i.e. for every 5 towels sold, 5 swimsuits and 10 beach accessories are sold) Find the break-even point for each product. The company's annual fixed costs are $68,000. Additionally, Sevall wants to achieve an operating profit of $102,000. How many units would it need to sell to achieve a profit of $102,000? Selling Variable Price Per Cost Per Unit Towels Swimsuits Beach Accessories 10 25 15 3 10 Name Sevall Surfware is a company that specializes in selling towels, swimsuits, and beach accessories. The sales mix is 5:5:10 (i.e. for every 5 towels sold, 5 swimsuits and 10 beach accessories are sold). Find the break-even point for each product. The company's annual fixed costs are $68,000. Additionally, Sevall wants to achieve an operating proft of $102,000. How many units would it need to sell to achieve a profit of $102,000 Selling Variable Price Per Cost Per Towels Swimsuits Beach Accessories 25 15 10 Industrial Grinders During the term, we had a case study, Industrial Grinders, which focused on Sunk and Opportunity Costs. Please refer to the table below, which comes from data in the Industrial Grinders case Industrial Grinders 100 Steel Rings (Unfinished or Specialized Steel) Competitor 100 Plastic Rings Industrial Grinders 100 Steel Rings (Finished) 320.40 320.40S Selling Price Costs Direct Material Direct Labor Overhead Departmental Administrative Total Manufacturing Co $ 4.20 S 15.60 76.65 46.80 31.20 5.60 66.60 S 93.60 46.80 263.85 Regarding the Overhead costs, these are allocated based on Direct Labor The Variable Overhead costs are 80% of the Direct Labor amount, and relate to the benefits for the labor force As you recall from the case, Industrial Grinders has the opportunity to hire the German Labor Force at a rate of 70% of the normal rate, what would be the RELEVANT costs for Decision-Making to produce the UNFINISHED (or Specialized Steel) to FINISHED steel? Please indicate your answers in the YELLOW boxes above Fixing our Environment Extemality enterprises are contemplaing how to react to Califomia regulstions regarding their proposed ol refinery in Redwood City They face two options Under option A, the initial investment would cost So 8B (3800M) to build wih out fuly meeting regudatory requirements The unik price and variable cost per barrel of this product is estimated to be $150 and $100 respectively. Whille Califomia would permit this facility to be built Externality would have to pay a penality of $15M per year afer taves Under Option B, the initial outlay for the oil reinery would triple to $24 B($2,400M However, with the added cost, there would be improvements with regand to increased operaing efficiencies and perceived quality Estimates suggest that the variable cost per barrel of product would be neduced to S75 and the price that Extermality couid charge oustomers would be raised to $200 per bamel Lasty, there would not be the annual $15M fee imposed by the Stte of Cami Under both conditions, they woud expect to produce and sel 5 milion barels per year. Addisionaly, the iniial investment would be expected to have a useful ife o 20 years without any salvage value at the end of the 20 years; for depreciation purposes, straight line depreciation would be used me tax rate is 40% vdthe cost of cacital is 10% both opersLasty, te prog vanatie costs and demand leves are es mated to be constat for next 20 years. nich opon should Eterna ty choose that would mainne Externaltys financal value? How did Caitoma penalty OS 15M annualy) attect yoreoormendatio? Please support your recommendasion with a Net Present Value caleuiation using discounted cash fow analysis ggestion: keep yor antwen hto mienHdnt get wrapped up und oit aeres: also. you may want to lock at 3JJ and y35 asthnproblem is ableed between re tw