Hersheys chocolate factory is introducing new gourmet chocolate and has hired you to conduct a financial analysis to figure how well the chocolate will do. They provided you with the information below to help you conduct your analysis.

Assistant manager's salary: $5,000 cocoa butter per bar of chocolate: $2 utilities: $1000 milk per bar of chocolate: $0.40 Rent: $4,000 Managers salary: $5,000 Sugar per bar of chocolate: $1.60 secret ingredient for each bar of chocolate: $3.00 Factory worker wages per bar of chocolate: $3.00

Hershey has decided to use Connecticut as a test market and the average price of a large gourmet bar of chocolate in Connecticut is $20. There are also 1 million bars of chocolate sold in Connecticut. Hershey decides to sell this new chocolate bar for the average price of a chocolate bar sold in Connecticut. They also project that they will be able to sell the equivalent of 1% of the bars of chocolate sold in Connecticut.

Use the numbers provided above to answer questions below. Make sure that you show all formulas and also show all your calculations

The company wants you to calculate :

How many chocolate bars they need to sell to break even.

The value (in dollars) of the number of chocolate bars they need to sell to break even.

What proportion of market share will they be capturing if all they do is sell enough chocolate to break even?

The company needs to know how much profit they will make. Using their projections of what they think they can sell, calculate their profits using the profit equation.

Create a Proforma Income Statement using the information provided in the pages above. The Cost of Goods Sold in this scenario is equal to the Total Variable Cost. Focus on the quantities sold that are associated with the Profit equation calculation in question 2. Not the break even quantities.

A sales person from Hershey approached Walgreens and asked them to sell the Chocolate in their retail stores. Hershey offered to sell a bar of chocolate to Walgreens for $15 dollars and Walgreens will sell the chocolate in their stores for $20. If Walgreens agrees to Hersheys terms:

What will Hersheys trade margin be?

What will Hersheys trade margin % be?

What will Walgreens trade margin be?

What will Walgreens trade margin % be?

Hershey decided that they wanted to change their margin percent to 40%. How much should they sell their chocolate to Walgreens?

If Hershey receives 40% margins for each bar of chocolate, and Walgreens still sells the chocolate for $20, what will Walgreens new trade margin % be?