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Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season and the business is

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Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer season and the business is heavily dependent on the weather and the economy in addition to new competition Sanjana Sweet, the owner prepares a budget each year after reading long-term weather forecasts and estimates of summer tourism. The budget is a first step in planning whether she will need any loans and whether she needs to consider adjustments to store staffing. Based on expertise and experience, she develops the following Gross Margin per Customer (Price - Cost of Goods) $5 Scenario Good Fair Poor Number of Customers 30,000 20,000 15,000 Sanjana assumes for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $25.000 plus $2 for every customer in excess of 20,000. The marketing and administrative costs are estimated to be $10.000 plus 3 percent of the gross margin Required: Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 1315. What is the range of operating incomes? Gross Margin Number of Customers Gross Margin Operating Costs Marketing & Admin Operating Profit (Loss) Required: Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes? Gross Margin Number of Customers Gross Margin Operating Costs Marketing & Admin Operating Profit (Loss) S $ $ $ 2 4 $ 5 $ GA 2 Poot Fal Good Poor Fair Good Poor Fair Good 15,000 15.000 15,000 20,000 20,000 20.000 30,000 Oo oo oo S 4 5 $ $ 5 $ 5 $ 5 2 0 $ 4 0 30,000 30.000 $ 5 $ 0

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