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Business Description After taking business classes, Cyrus, an avid sportsman, decided to start selling unique sporting supplies for children at trade shows. He has two
Business Description After taking business classes, Cyrus, an avid sportsman, decided to start selling unique sporting supplies for children at trade shows. He has two products: Product 1: "Ultimate Frisbee"- an aerodynamic frisbee that will sell for $15.00. Product 2: "Booming Boomerang"- a handcrafted wooden boomerang set. The boomerang will sell for $30.00. a Costs: Cyrus has hired an employee to work the trade show booths. The work contract is $1,000 per month plus a commission equal to 15% of selling price. Cyrus will also spend $545 per month on trade-show entry fees. Cyrus is purchasing the products from a supplier in Mexico. Ultimate frisbee costs $3.00 each; Booming boomerang cost $8 each. Shipping and handling on the Frisbee will cost $1.20 each; Shipping and handling on the Boomerangs which are heavier, will cost $4.00 each. The shipping and handling costs will be paid by Cyrus, not the customer. Assume Cyrus expects to sell 200 Frisbees and 100 Boomerangs during his first month of operations (November). The sales mix is 2" Frisbees" for every 1 "Boomerang" or a 2:1 ratio. Cyrus' long-term financial goal is to earn an operating income of $4,200 per month. ASSUMPTIONS Product #1: Sales price per unit Variable costs per unit: Frisbee $ 15.00 Total variable cost per unit Monthly volume Sales Mix Product #2: Sales price per unit Variable costs per unit: Boomeramg $ 30.00 Total variable cost per unit Monthly volume Sales Mix Fixed costs per month: Total fixed costs per month Target profit per month
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