oni anyone except your instructor Financial information for the project: 1. You
ID: 340957 • Letter: O
Question
oni anyone except your instructor Financial information for the project: 1. You decide to open a small business in Charleston, WV that will cater primarily to busy office workers downtown. You are going to offer a gourmet box lunch to be delivered to any office with a minimum number of 5 orders. This lunch will include a gourmet sandwich, a bag of chips, a cookie, and a bottle of water. Because you are using only the finest ingredients, you will charge $9.15per lunch 2. The cost of the food items (cost of goods sold) in each lunch is budgeted at $3.25. These are primarily perishable items, so inventory is negligible. You pay for virtually all of your purchases by check at the time they occur 3. You are planning on drawing out a monthly salary of $1500. 4. You are planning on hiring an assistant to help you with packing the box lunches and delivering them 20 hours per week at $9.00 per hour. Assume four weeks in the month. Assume you will pay your assistant regardless of the hours they are actually needed. Treat this as a fixed cost 5. You believe you must heavily advertise to get your business established. The amount you are willing to spend is 6% of your monthly revenue. Even though you are using sales revenue to determine the dollar amount of your advertising, treat this as a fixed cost. Advertising costs are paid in the month incured. 6. You have to pay rent on a commercial kitchen where you will store your items and prepare your box lunches. The rent is S455 per month. Rent is payable on the I" day of the month. 7. You will rely on a fax machine to receive your orders. The cost of the phone line is $100 per month. Payment for the current month will occur in the next month when the bill is receivedExplanation / Answer
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WV Monthly income statement Revenue 11437.50 Cost of goods sold 4062.50 Gross margin 7375.00 Expenses: Advertising 686.25 Truck operating cost 562.50 Wages expense 720.00 Salary expense 1500.00 Rent Expense 455.00 Lease rental for truck 415.00 Telephone expense 100.00 Electricity expense 275.00 Total Expenses 4713.75 Net Income 2661.25Related Questions
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