BackGround:

Glacier, Inc. is owned by Alex and Barbara Konda. The company provides training, supplies, and equipment for

operating a shaved ice business. Shaved ice is an ice-based refreshment made by shaving a block of ice into a

fluffy, snow-like ice. The product is served in cups with flavored syrups added to the ice. Due to its fine texture,

shaved ice absorbs the syrup, making each bite flavorful. Glacier does not sell franchises. It sells a wide array of

equipment and supplies, including ice shavers, kiosks, carts, buses, syrups, cups and other supplies to independent

operators.

part 1:

Assume that you are evaluating whether to start a Glacier business. You could operate a shaved ice kiosk at fairs,

downtown areas, and other outdoor events. The kiosk is portable with wheels and a hitch. It has plenty of storage

space, work area, electrical outlets, lighting, and a water system. The flavored shaved ice, a "Glacier" (or snow

cone), is normally offered in three sizes. For this case, we are going to assume that only one size is offered - the

20 oz. size. This large Glacier sells for $4.00. See Table for a list of all costs related to a large-size Glacier.

In this case, use straight-line depreciation with a five-year life and salvage values of zero for both the ice shavers

and the flavor station.

Specify your assumptions about the following items:

a. Number of days you anticipate opening the Glacier kiosk per month _____

b. Number of hours you will work (no wages required) per day _____

c. Number of hours you will pay an employee to work in the Glacier kiosk per day _____

Part 2:

Assume that Park Lane Reno, an organization that hosts outdoor events in downtown Reno, approaches you about

bringing your Glacier kiosk to the Octoberfest in Reno for one day in October. Park Lane Reno will provide the

cups for the event that are branded with the Reno Octoberfest logo, so you will not have any cup costs for this

event. Park Lane Reno will also not be charging you a registration fee for this event. Park Lane Reno will allow you

to advertise your business in its mailings for two months at no cost and asks you to cut your Glacier price for this

one event to $3.00 in exchange for the free advertising. You have no other event scheduled for this one day in

October, and you would work the event by yourself (you will not pay an employee for this one-day event). You

anticipate that you will sell 200 Glaciers on this one day at Octoberfest. Do you accept Park Lane Reno's special

price offer? Why or why not? Support your answer.

additional information:

COSTS All listed costs relate to the large size Glacier Ice per Glacier Stilt} Spoon straw {need one per Glacier} Silt]? Styrofoam cup {need one per Glacier] Sil Napkin per sheet [need two per Glacier] Sl Servings per gallon of syrup 23 Cost per gallon of svrup {includes concentrate, preservative, and sugar] $4.25 Hourlyr rate for workers Sl Event registration fee per dayr 525.0(3! Electricitv, insurance, maintenance, and permit costs per month $25 Kiosk rental per month $65 Purchase cost of two ice shavers [fiveveer life} 53,13 Purchase cost of a avor station [fivevear life} 51,8.