Hello Prof, Need your help again for one of my project Please find attached question and a sample template on how to answer Thanks in advance
Hotdog Cart In Class Exercise Assume that you want to open a hotdog stand in Columbus, Ohio. Attached is some information to help you. Assume you normally sell a hotdog and beverage in a transaction. Below is some data pertaining to this project: General Business Insurance Labor per cost Payroll tax rate IRS Mileage Rate Cost Info $1,100 $8.50 22% $0.55 Some other costs to consider: Show Rental Fees Accounting and Tax Fees Supplies Telephone Maintenance and Repairs Propane Gas Advertising & Promotion Charitable Contributions Contract Labor Miscellaneous Office Expense Permits and Licenses Postage Internet Access Calculate depreciation using the straight line method with a 7 year life for all assets. The remaining costs for operating this business are for you to estimate. 1. Show the total fixed costs in detail. 2. Show the total variable cost per unit in detail. 3. Calculate the per unit contribution margin. 4. How many hotdogs will you need to sell to break even? 5. How many hotdogs will you need to sell to make a profit of $25,000. 6. How many hotdogs will you need to sell to make a profit of $25,000 after tax profit if the marginal tax rate is 40%. 7. Prepare a contribution income statement at the level of units calculated in question 5 above. 8. Calculate your leverage factor at the level of units calculated in question 5 above. Hotdog Business Analysis Depreciation Cart Cost Divided by 7 Years Yearly Depreciation Price Hotdog & Pop Variable Costs Hotdog Pop Show Fee (20%) Condiments Paper Products Total Variable Cost & % Contribution Margin & CM% 7 $ - $ $ $ $ $ $ $ - #DIV/0! #DIV/0! Fixed Costs (Year) Accounting and Tax Fees Mileage Wages Paroll Taxes Business Insurance Supplies Telephone Maintenance and Repairs Propane Gas Advertising & Promotion Charitable Contributions Contract Labor Miscellaneous Office Expense Permits and Licenses Postage Depreciation Internet Access Total Fixed Costs Based on XX shows and average of XX miles per show Based on XX shows and average of XX hours per show $ $ - Breakeven Point #DIV/0! units Breakeven Point + $25,000 Profit #DIV/0! units Breakeven Point + $25,000 After Tax Profit #DIV/0! units CM Income Statement Sales ($XXXXXX x $XXX) Variable Costs ($XXXXX x $XXX) Contribution Margin Fixed Costs Total Income Before Tax Leverage Factor Contribution Margin/Net Income $ - $ - Hotdog Stand Sample Answers Depreciation Cart Cost Divided by 7 Years Yearly Depreciation Price Hotdog & Pop Variable Costs Hotdog Pop Show Fee (20%) Condiments Paper Products Total Variable Cost & % Contribution Margin & CM% $ 9,295.00 7 $ 1,327.86 $ $ $ $ $ $ $ $ 4.50 2.10 2.40 0.35 0.50 0.90 0.20 0.15 46.67% 53.33% Fixed Costs (Year) Accounting and Tax Fees Mileage Wages Paroll Taxes Business Insurance Supplies Telephone Maintenance and Repairs Propane Gas Advertising & Promotion Charitable Contributions Contract Labor Miscellaneous Office Expense Permits and Licenses Postage Depreciation Internet Access Total Fixed Costs $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Breakeven Point $ 17,094.86 $ 2.40 7,122.86 units $ 42,094.86 $ 2.40 17,539.52 units $ 58,761.52 $ 2.40 24,483.97 units Breakeven Point + $25,000 Profit Breakeven Point + $25,000 After Tax Profit 1,500.00 1,650.00 Based on 50 shows and average of 60 miles per show x Milage Rate 6,800.00 Based on 50 shows and average of 16 hours per show x wage rate 1,496.00 1,100.00 450.00 600.00 350.00 340.00 120.00 60.00 150.00 367.00 235.00 100.00 89.00 1,327.86 360.00 $ 17,094.86 CM Income Statement Sales (17,301.43 x $4.50) Variable Costs (17,301.43 x $2.10) Contribution Margin Fixed Costs Total Income Before Tax Leverage Factor Contribution Margin/Net Income $ $ $ $ $ 78,927.86 36,833.00 42,094.86 17,094.86 25,000.00 1.68 You will need to find cost information on a vending machine and do CVP analysis similar to what we have done in class. I have provided a format for you to follow in the Week 8 Folder. Upload your answer below to show your work. You should structure your business based on the following information: Use only one style of vending machine but at least 5 locations. Below is some data pertaining to this project: Costs General Business Insurance $1,100 Labor per hour cost $ 8.50 Payroll tax rate 22% IRS Mileage Rate $ .55 Rental Cost 20% of gross sales Some other costs to consider: Accounting and Tax Fees Supplies Telephone Maintenance and Repairs Charitable Contributions Contract Labor Miscellaneous Office Expense Permits and Licenses Postage Internet Access Calculate depreciation using the straight line method with a 7 year life for all assets. The remaining costs for operating this business are for you to estimate. 1. Show the total fixed costs in detail. 2. Show the total variable cost per unit in detail. 3. Calculate the per unit contribution margin. 4. How many units will you need to sell to break even? 5. How many units will you need to sell to make a profit of $5,000. 6. How many units will you need to sell to make a profit of $5,000 after tax profit if the marginal tax rate is 40%. 7. Prepare a contribution income statement at the level of units calculated in question 5 above. 8. Calculate your leverage factor at the level of units calculated in question 5 above
