THE SCENARIO: 31 Scoops Ice Cream is a new concept in gourmet ice cream and is finishing up its business plan for upcoming Venture Capital rounds. It just needs to complete a Break Even Analysis to finish. In order to get started with its ice cream business, 31 Scoops will need to purchase some state-of-the-art ice cream manufacturing equipment valued at $50,000, which they will be able to purchase at a 30% discount. In addition, they will need to rent several store locations for a total of $15,000 per month. Other fixed costs include $6,000 in total monthly salaries for 3 scoopers and other miscellaneous expenses of $2,000 per month. For you accounting "experts" out there, for the purposes of this exercise, you may ignore the impact/effect of advanced accounting topics that we haven't touched in this class, such as depreciation, amortization, EBITDA, etc. 31 Scoops estimates Variable Unit Costs to be $1. They would also like to remain price competitive and charge $3.50 per serving of ice cream. What is the break-even point -- or how many servings of ice cream must be sold to break even. given a one year time horizon? What is the break-even point if the time horizon is changed to two years? 31 Scoops has now found a special type of cream that they want to use in their product, which will change their cost per serving of ice cream by 10 cents. They wish to offset this by increasing the price by 10 cents as well. Now, what is the break-even point if the time horizon is still two years? Now assume that you have to take into account the scooping ability of your employees. Let's assume that one scooper can scoop up 35,000 servings of ice cream per year -- that's a LOT of scooping! Look at your break-even point from Question 1, and see how many scoopers you need to scoop that many servings. If you don't have the right number of scooper employees (either too few or too many), then adjust your fixed costs to account for the new number of scoopers (one scooper costs $2,000 in monthly salary) and tell me what is the new break-even point. Upload your work in an excel file for all four problems here. Please name your document Break_Even_Analysis_[your last name].xls, so for example if I were to name the document, it would be Break_Even_Analysis_Lew.xls. Make sure to clearly label each problem in your spreadsheet, and show all your work. The work for each problem is worth up to 0.75 point. Even if you get the answer wrong, I will give partial credit for work that is clearly documented and logical.