Chicken Sensations

Panel A: Sales and Marketing Data

Case Configuration:

Pounds per case $15$ Expected pounds per case

Bags per case $12$ Expected number of bags per case

Forecasted Sales Volume $($Cases$)$:

Cases Sold Annual Sales Cases

First month sales volume $$65,000$ Initial sales forecast for the first month

Monthly sales growth $-$ Year $1$ $$15,000$ Sales growth per month for the first year

Months per year in Year $112$ Number of months in a year

Sales forecast error percentage $25\%$ Percent possible sales forecast error

December sales volume $$230,000$

First year sales volume $$1,770,000$

Annual sales volume after Year $1$ $$2,760,000$

Sales Price$/$Coupon Costs$/$Commission:

Bags$/$Case Per Case

Sales price to retailers $($price per bag$)$ $$3\mathrm{.}0012$ $$36\mathrm{.}00$ Based on sales price per bag and number of bags per case

Coupon costs $($price per bag$)$ $$0\mathrm{.}2012$ $$2\mathrm{.}40$ Based on coupon per bag and number of bags per case

Commission $($percentage$)6\%$ $$2\mathrm{.}16$ Percentage of sales price paid to brokers

Slotting$/$Package Design$/$Sales Salaries:

Total Cost $($$$)$ Useful Life Annual

Slotting costs $$6,000,0001$ $$6,000,000$ Expected slotting costs to be expensed over n years

Package design costs $$2,000,0001$ $$2,000,000$ Expected packaging design costs paid in the first year

Sales salaries $$400,000$ $$400,000$ Expected annual additional sales and marketing salaries to be paid

Panel B: Production and Cost Data

Raw Material Percents$/$Costs $($per lb$)$:

Percent Cost$/$LB Per Case $($$$)$

Chicken $20\%$ $$2\mathrm{.}00$ $$0\mathrm{.}40$ Expected cost of chicken per pound

Vegetables $65\%$ $$0\mathrm{.}50$ $$0\mathrm{.}33$ Expected cost of vegetables per pound

Spaetzels $15\%$ $$0\mathrm{.}15$ $$0\mathrm{.}02$ Expected cost of spaetzels per pound

Total $($Must be $100\%)100\%$ $$0\mathrm{.}75$ Total must be $100\%$

Weighted average raw material cost$/$lb$.$ $$0\mathrm{.}88$ Weighted average cost per pound

Pounds per case $15$

Total Raw Material Cost per Case $$13\mathrm{.}25$ Chicken Sensations cost per case $(15$ pounds per case$)$

Packaging Costs:

Cost per Bag$/$Box Qty$/$Case Per Case

Bags $$0\mathrm{.}20$ $$2\mathrm{.}40$ Based on price per bag and number of bags per case

Box $$0\mathrm{.}301$ $$3\mathrm{.}60$ Expected price per box with one box per case

Total Packaging Cost per Case $$6\mathrm{.}00$ Total packaging costs of bags and boxes per case

Total Direct Material Costs per Case Total of Chicken Sensations and packaging costs

Conversion Costs:

Cost Per Lb $($$$)$ Lbs$/$Case Per Case $($$$)$

Direct labor $$0\mathrm{.}3015$ $$4\mathrm{.}5000$ Based on labor costs per pound and number of pounds per case

Variable manufacturing overhead $$0\mathrm{.}4015$ $$6\mathrm{.}0000$ Based on var. mfg$.$ overhead per pound and number of pounds per case

Total Coversion Cost per Case $$10\mathrm{.}5000$ Total conversion costs per case

Total Variable Product Cost per Case Total direct material and conversion costs per case

Retrofit Costs:

Total Cost $($$$)$ Useful Life Annual Depreciation

Retrofit costs $$2,000,0005$ $$400,000$ Expected retrofit costs and depreciable life

Chicken Sensations Year of Projected Perfomance Analyzed

Selected Year of Analysis: Year $1$

Total variable costs? Variable costs? Fixed costs? Total fixed costs $\backslash$table$[[,$Percent,Cost$/$LB$,$Per Case $($ $ $),],[$Whicken$,20\%,$$$2\mathrm{.}00,$$$0\mathrm{.}40,$Expected cost of chicken per pound$],[$Tegetables$,65\%,$$$0\mathrm{.}50],$$$0\mathrm{.}33,$Expected cost of vegetables per pound$],[$Spaetzels$,15\%,$$$0\mathrm{.}15,$$$0\mathrm{.}02,$Expected cost of spaetzels per pound$],[$Total $($Must be $100\%),100\%,,$$$0\mathrm{.}25,$Total must be $100\%],[$Weighted average raw material cost$/$lb$,,,$$$0\mathrm{.}88,$Weighted average cost per pound$],[$Pounds per case,,,$15\_,],[$Raw Material Cost per Case,,,$$11\mathrm{.}25,$Chicken Sensations cost per case $(15$ pounds per case$)],[$Packaging Costs:$],[,$Cost per Bag$/$Box$,$Qtv$/$Case$,$Per Case,$],[$ags$,$$$$0\mathrm{.}20,\backslash$bar $(12),\backslash$bar $(($$$2\mathrm{.}40),$Based on price per bag and number of bags per case$],[$ox$,$$$0\mathrm{.}30,1,$$$0\mathrm{.}30\_,$Expected price per box with one box per case$],[$I Packaging Cost per Case,,,$$2\mathrm{.}70,$Total packaging costs of bags and boxes per case$],[$Direct Material Costs per Case,,,$$13\mathrm{.}9500,$Total of Chicken Sensations and packaging costs$]]$

$1.$a$.$ DATA SHEET

$1.$b$.$ Forecasted CM Income Stmt

c$.$ Breakeven

d$.$ Margin of Safety