Question
Jody has a natural talent for baking. She as a line of credit of $24,000 with 6.5% interest rate (4.5% interest rate in the first
Jody has a natural talent for baking. She as a line of credit of $24,000 with 6.5% interest rate (4.5% interest rate in the first year). She wants to build out her basement for her the business but it requires $20,000. With some early planning/research, Jody has determined that the following sales numbers are reasonable for her first month of business, possibly January 2023:
Item Sales | Sales Volume | Sale price | sales total |
cookies batch(12) | 100 | 7.5 | 750 |
muffins batch (4) | 100 | 7.2 | 720 |
cupcakes batch (6) | 80 | 8 | 640 |
others ( products) | 490 | ||
total | 2600 |
Jody has projected monthly fixed costs of $600 when she starts her business (these are currently incurred as living expenses, though at lower rates such as the depreciation of the baking oven). There will also be approximate variable expenses equal 40% of the sale price for each baked good (including others). She is also think about investing additional $4000 for industrial appliances, which can lead to additional 500 worth of "other" goods, 500 items in total of cookies, cupcakes, and muffins (e.g., 200 dozen of cookies, 150 half-dozens of cupcakes, and 150 quartets of muffins) monthly while working on a part-time work basis.
As her financial manager show Jody if she should invest in basement and whether the industrial appliance investment
is worthwhile now or in the future , give her a detailed analysis
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