Kai Paris is the sole proprietor of Cookie Monster Inc (CMI). He started his online specialty cookie company a few months ago and it specializes in gluten free cookies that are produced in a gluten free facility (celiac friendly). Currently there are three main products: macaroons, chocolate chip cookies, and ginger snaps. How Kai arrived at those three types of cookies is that those are his wifes favourites. Kai does not have an accounting background. He is a pastry chef with a passion for baking.

You are a recent grad of Okanagan College and are thrilled to be working with Kai as the controller of CMI. One day, Kai says to you One of the reasons why I hired you is because I am struggling on how to choose which cookies to make. I only have one oven at the moment and I am the only baker. The oven will be operating 12 hours a day, 6 days a week. I am sure there must be an easy way to figure out which cookies should be a priority. Right now I am just choosing based on demand, so I make ginger snaps until demand is satisfied, then chocolate chip until demand is satisfied, then whatever time I have left I make macaroons.

The facilities of CMI are fairly basic. To save on costs, Kai has avoided leasing or buying a commercial kitchen and makes everything in the extra residential kitchen he has in his basement. He uses this space strictly for CMI and all the ingredients are stored here, separate from his personal kitchen upstairs; however, if he runs out of an ingredient, he can always take a look around to see if he has anything that can act as a substitute upstairs.

	PRODUCTS
	Macaroon	Chocolate Chip	Ginger Snaps
Selling price per cookie	$2.50	$1.75	$1.50
Direct Materials per cookie	1.05	.50	.65
Direct Labour per cookie	.75	.6	.45
Variable Overhead per cookie	.12	.15	.08
Minutes per unit	.65	1.5	1.1
Weekly demand in units	1100	1200	2000

After a casual chat, Kai mentions I got into this business as it is a passion of mine. I didnt crunch any numbers to determine at what point I am making money. Lucky for me, I dont have many other expenses over and above the items included for the products, and your salary of $750 a week. So when would I break even under your suggested cookie production schedule? How is that different from when I would break even now?

One last item? Kai asks. It is always great to have a fresh set of eyes analyze your business. Do you see any areas of risks that I should be addressing? Please prepare a memo summarizing all this information for me by next week. Bullet points are fine

REQUIRED:

Prepare an excel file, an executive summary of your findings