Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please read and answer the questions in the following images: Jerry Smith has found a location on Tremont Street in Boston to open a pizza

Please read and answer the questions in the following images:

image text in transcribedimage text in transcribedimage text in transcribed

Jerry Smith has found a location on Tremont Street in Boston to open a pizza and sub shop. The store size is 1,200 square feet and it requires about $100 per square foot in renovation, fixtures and equipment (balance sheet item not an income statement item). The rent for the said location is $67,000 per year. Jerry is planning to be open 7 days a week 15 hours per day. Jerry projects the store sales per day to be $2,200 (7 days a week 52 weeks a year). In addition, Jerry is counting on having 3 employees at all time in the store at an average pay of $15.15 per hour. Jerry has contacted you to help him to determine the following on an annual basis Sales/Revenues $ COGS $ COGS % Gross Profit $ Gross margin % Variable Cost $ Contribution margin S Contribution margin % Fixed Cost $ EBITDA $ Break Even point sales S Jerry has supplied you with the following information: Sales Categories COGS% Anticipated pay date % to total sales 59% Pizza 40% Subs 36% 40% Monthly-In the middle of the month Monthly-second week of the month Monthly-At the end of the month Soda 5% 30% Operating cost Per Year Per Month Anticipated pay date Monthly-First week of the month Weekly-Once a week Weekly-Once a week 21% Rent Payroll Benefits and Taxes Utilities Telephone Computer Maintenance 500 200 Monthly-In the middle of the month Monthly-In the middle of the month Monthly At the end of the month 100 1,200 75 330 200 Monthly-At the end of the month Monthly-In the middle of the month Monthly-First week of the month Weekly-Once a week Monthly-In the middle of the month 3% 100 Monthly-In the middle of the month POS Expense POS Lease Vehicle Lease Vehicle Fuel Merchandise Supplies Office Supplies Professional fees Insurance Commission Marketing Credit Card Fees Miscellaneous 1,200 Monthly-In the middle of the month 2,500 2.5% 25,000 2.9% Monthly-First week of the month Monthly-At the end of the month Monthly-At the end of the month Weekly-Once a week 1.987 Monthly-At the end of the month *middle of the month is week 3 **end of the month is week 4 In addition Jerry has asked you to forecast the store's cash flow for 5 weeks average. The beginning cash is $6,500. Week 1 Week 2 Week 3 Week 4 Week 5 Cash in Beginning cash Sales Total cash in Cash out Payables (Variable cost and Fixed cost) Pizza Subs Soda Credit card fees Merchandise Supplies Commission Rent Payroll Benefits and Taxes Utilities Telephone Computer Maintenance Computer Expense Computer Lease Vehicle Lease Vehicle Fuel Marketing Office Supplies Professional fees Insurance Miscellaneous Total cash out Net Cash flow Jerry Smith has found a location on Tremont Street in Boston to open a pizza and sub shop. The store size is 1,200 square feet and it requires about $100 per square foot in renovation, fixtures and equipment (balance sheet item not an income statement item). The rent for the said location is $67,000 per year. Jerry is planning to be open 7 days a week 15 hours per day. Jerry projects the store sales per day to be $2,200 (7 days a week 52 weeks a year). In addition, Jerry is counting on having 3 employees at all time in the store at an average pay of $15.15 per hour. Jerry has contacted you to help him to determine the following on an annual basis Sales/Revenues $ COGS $ COGS % Gross Profit $ Gross margin % Variable Cost $ Contribution margin S Contribution margin % Fixed Cost $ EBITDA $ Break Even point sales S Jerry has supplied you with the following information: Sales Categories COGS% Anticipated pay date % to total sales 59% Pizza 40% Subs 36% 40% Monthly-In the middle of the month Monthly-second week of the month Monthly-At the end of the month Soda 5% 30% Operating cost Per Year Per Month Anticipated pay date Monthly-First week of the month Weekly-Once a week Weekly-Once a week 21% Rent Payroll Benefits and Taxes Utilities Telephone Computer Maintenance 500 200 Monthly-In the middle of the month Monthly-In the middle of the month Monthly At the end of the month 100 1,200 75 330 200 Monthly-At the end of the month Monthly-In the middle of the month Monthly-First week of the month Weekly-Once a week Monthly-In the middle of the month 3% 100 Monthly-In the middle of the month POS Expense POS Lease Vehicle Lease Vehicle Fuel Merchandise Supplies Office Supplies Professional fees Insurance Commission Marketing Credit Card Fees Miscellaneous 1,200 Monthly-In the middle of the month 2,500 2.5% 25,000 2.9% Monthly-First week of the month Monthly-At the end of the month Monthly-At the end of the month Weekly-Once a week 1.987 Monthly-At the end of the month *middle of the month is week 3 **end of the month is week 4 In addition Jerry has asked you to forecast the store's cash flow for 5 weeks average. The beginning cash is $6,500. Week 1 Week 2 Week 3 Week 4 Week 5 Cash in Beginning cash Sales Total cash in Cash out Payables (Variable cost and Fixed cost) Pizza Subs Soda Credit card fees Merchandise Supplies Commission Rent Payroll Benefits and Taxes Utilities Telephone Computer Maintenance Computer Expense Computer Lease Vehicle Lease Vehicle Fuel Marketing Office Supplies Professional fees Insurance Miscellaneous Total cash out Net Cash flow

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Capital Markets Institutions Instruments And Risk Management

Authors: Frank J. Fabozzi

5th Edition

0262029480, 9780262029483

More Books

Students also viewed these Finance questions