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Please complete this case study using the following assumptions for Part 1 and Part 2 : INTRODUCTION Snowie , owned by Carl and Gordon Rupp,
Please complete this case study using the following assumptions for Part and Part :
INTRODUCTION
Snowie owned by Carl and Gordon Rupp, is a company that provides training, equipment, and supplies for operating a shaved ice business. Shaved ice is an icebased refreshment made by shaving a block of ice into a fluffy, snowlike ice. The product is served in cups with flavored syrups added to the ice. Due to its fine texture, shaved ice absorbs the syrup, making each bite flavorful. Snowie does not sell franchises. It sells a wide array of equipment and supplies, including ice shavers, kiosks, carts, buses, syrups, cups, and other supplies to independent operators.
Costs
All listed costs relate to the large size Snowie
Ice per Snowie $
Spoon straw need one per Snowie $
Styrofoam cup need one per Snowie $
Napkin per sheet need two per Snowie $
Servings per gallon of syrup
Cost per gallon of syrup includes concentrate, preservative, and sugar $
Hourly rate for workers $
Event registration fee per day $
Electricity, insurance, maintenance, and permit costs per month $
Kiosk rental per month $
Purchase cost of two ice shavers fiveyear life $
Purchase cost of a flavor station fiveyear life $
Assumption made for this case
All monetary figures are expressed in US dollars
Assumptions
Number of days you anticipate opening the Snowies Kiosk per month days
Number of hours you will work per day hours per day
Number of hours you will pay employees per day hours per day
PART : COSTVOLUMEPROFIT ANALYSIS FOR A SNOWIE KIOSK
Assume that you are evaluating whether to start a Snowie business. You could operate a shaved ice kiosk at fairs, downtown areas, and other outdoor events. The kiosk is portable with wheels and a hitch. It has plenty of storage place, work area, electrical outlets, lighting, and a water system. The flavored shaved ice, a Snowie is normally offered in three sizes. For this case, we are going to assume that only one size is offeredthe large size, oz The large Snowie sells for US$ See Table for a list of all costs related to a large size Snowie. In this case, use straightline depreciation with a fiveyear life and salvage values of zero for both the ice shavers and the flavor station. All monetary amounts in this case are expressed in US dollars.
PART : SPECIALORDER PRICING FOR A SNOWIE EVENT Assume that Main Street Kent, an organization that hosts outdoor events in downtown Kent, approaches you about bringing your Snowie kiosk to the Octoberfest in Kent for one day in October. Main Street Kent will provide the cups for the event that are branded with the Kent Octoberfest logo so you will not have any cup costs for this event. Main Street Kent will also not be charging you a registration fee for this event. Main Street Kent will allow you to advertise your business in its mailings for two months at no cost and asks you to cut your Snowie price for this one event to US$ in exchange for the free advertising. You have no other event scheduled for this one day in October, and you would work the event by yourself you will not pay an employee for this oneday event You anticipate that you will sell Snowies on this one day at Octoberfest. Do you accept Main Street Kents special price offer? Why or why not? Support your answer
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