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PLEASE HELP ME WITH QUESTION # 2 ! Cash / Finance Lecture Widget Business Problem 1 : Break Even Analysis Selling Price of Widget: $
PLEASE HELP ME WITH QUESTION # CashFinance Lecture Widget Business Problem : Break Even Analysis Selling Price of Widget: $ Cost of Goods Sold Material $ Assume that there are only material costs associated with the Cost of Goods Sold COGS That is there is no labor or other direct items associated with the manufacture of the product. For the purposes of this exercise I have classified direct labor in fixed costs. Fixed Costs Dir Labor, Overhead, SG&A: $ month Machinery & Equipment: $ Assume machinery and equipment is on books at $ as of Jan. with a year useful life. For ease of calculation you can assume straightline depreciation. You can assume it was an equity contribution made by the founder Question Set : Calculate monthly profit break even Calculate the monthly cash break even Show work and use both the "total revenue total cost" approach and break even using the "fixed costcontribution margin" formula. Problem : Cash Flow & Income Assume that the selling price, material cost, fixed costs, equipment and depreciation are all the same as in Problem but with the following information: In order to be in business you must have a buffer of one month's worth of inventory on hand at all times. Therefore, since you begin business on Jan you need to order months worth of inventory on Jan st which you can pick up the next day cash on delivery COD You estimate that the amount of business you will do is the same for January and February and that amount is equal to the amount of units you need to reach profit break even the amount you calculated from Problem You ship all the widgets throughout the month and get paid immediately when you ship or sell the widgets. Question Set : Calculate your cash position at the end of January. Develop an Income Statement for January. Calculate the difference between the January cash generationuse versus profits. Note: For Question Sets and don't worry if you have negative balances in any asset
PLEASE HELP ME WITH QUESTION #
CashFinance Lecture
Widget Business
Problem : Break Even Analysis
Selling Price of Widget:
$
Cost of Goods Sold Material
$
Assume that there are only material costs associated with the Cost of Goods Sold COGS That is there is no labor or other direct items associated with the manufacture of the product. For the purposes of this exercise I have classified direct labor in fixed costs.
Fixed Costs Dir Labor, Overhead, SG&A:
$ month
Machinery & Equipment:
$
Assume machinery and equipment is on books at $ as of Jan. with a year useful life. For ease of calculation you can assume straightline depreciation. You can assume it was an equity contribution made by the founder
Question Set :
Calculate monthly profit break even
Calculate the monthly cash break even
Show work and use both the "total revenue total cost" approach and break even using the "fixed costcontribution margin" formula.
Problem : Cash Flow & Income
Assume that the selling price, material cost, fixed costs, equipment and depreciation are all the same as in Problem but with the following information:
In order to be in business you must have a buffer of one month's worth of inventory on hand at all times. Therefore, since you begin business on Jan you need to order months worth of inventory on Jan st which you can pick up the next day cash on delivery COD
You estimate that the amount of business you will do is the same for January and February and that amount is equal to the amount of units you need to reach profit break even the amount you calculated from Problem
You ship all the widgets throughout the month and get paid immediately when you ship or sell the widgets.
Question Set :
Calculate your cash position at the end of January.
Develop an Income Statement for January.
Calculate the difference between the January cash generationuse versus profits.
Note: For Question Sets and don't worry if you have negative balances in any asset
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