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Business Description After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product
Business Description After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product 1: "Launch-it"- a tennis ball thrower that will sell for $10. Product 2: "Treat-time" an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $30. Costs: Jake has hired an employee to work the trade show booths. The work contract is $1,000 per month plus a commission equal to 10% of revenue Jake will also spend $500 per month on trade show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-its cost $1 each; Treat times cost $7 each. Shipping and handling on the Launch-its will cost $2 each; Shipping and handling on the Treat-times, which are heavier, will cost $8 each. The shipping and handling costs will be paid by lake, not the customer. Assume Jake expects to sell 200 Launch-its and 100 Treat-times during his first month of operations (June). Jake's financial goal is to earn an operating income of $8,000 per month. He believes volume may grow at a rate of 5% a month. ASSUMPTIONS Product 111: Sales price per unit Variable costs per unit: Manufacturing Cost Shipping Cost Launch-it 10 3 1 2 Total variable cost per unit 600 200 Monthly volume Net Sales Product #2: Sales price per unit Variable costs per unit: Manufacturing Cost Shipping Cost 2000 Treat-time 30 15 7 8 15 1500 100 3000 Total variable cost per unit Total variable cost Monthly volume Net Sales Fixed costs per month: Salary Payable Trade Booth Fees Total fixed costs per month 1500 1000 500 1500 Target profit per month 8000 Expected change in volume (%) 5%
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