casual comfort case
Jaquita Welch
Casual Comfort
MGT 440
October, 2, 2014
1. Pro Forma Income Statement
REVENUE
1998/1999
Gross sales
$30000
Less sales returns and allowances
0
Net Sales
30000
Total Cost of Goods Sold
$18000
Gross Profit
$12000
OPERATING EXPENSES
Selling
Salaries and wages
$10,000
Office Supplies
50
Advertising
1000
Depreciation
0
Shipping
400
Total Expenses
$11450
General/Administrative
Employee benefits
4
Payroll taxes
2
Insurance
6
Rent
8
Utilities
2
Depreciation & amortization
3
Total General/Administrative Expenses
$300
Total Operating Expenses
$11750
Net Income Before Taxes
$250
Taxes on income
250
Net Income After Taxes
$00
NET INCOME
0
If it costs $60 to produce a bean bag with high quality Vinyl, and there are fixed costs of $205, the break-even point for selling the widgets would be:
If selling for $100: 294 Bean Bags (Calculated as 11750/(100-60)=293.75)
If selling for $80: 588 Bean Bags (Calculated as 11750/(80-60)=587.5)
A. I decided to produce one type of chair, the one maid with high quality vinyl. I made this decision so we have a quality product but not too expensive like the leather costs.
B. I think the best and cheapest distribution would be from selling onine because the only cost they would occurs from creating a website and shipping fees. I allocated 400 dollars for shipping fees.
C. For the advertising strategy I decided to use 1000 dollars for that and use the radio, at 8-25 dollars per ad I think we could get 2 per month at this rate.
D. I set a price point of 100 dollars so we could keep it in the college student range and at half the price of the ones already being offered.
E. At the 100 dollar price point they
Casual Comfort
MGT 440
October, 2, 2014
1. Pro Forma Income Statement
REVENUE
1998/1999
Gross sales
$30000
Less sales returns and allowances
0
Net Sales
30000
Total Cost of Goods Sold
$18000
Gross Profit
$12000
OPERATING EXPENSES
Selling
Salaries and wages
$10,000
Office Supplies
50
Advertising
1000
Depreciation
0
Shipping
400
Total Expenses
$11450
General/Administrative
Employee benefits
4
Payroll taxes
2
Insurance
6
Rent
8
Utilities
2
Depreciation & amortization
3
Total General/Administrative Expenses
$300
Total Operating Expenses
$11750
Net Income Before Taxes
$250
Taxes on income
250
Net Income After Taxes
$00
NET INCOME
0
If it costs $60 to produce a bean bag with high quality Vinyl, and there are fixed costs of $205, the break-even point for selling the widgets would be:
If selling for $100: 294 Bean Bags (Calculated as 11750/(100-60)=293.75)
If selling for $80: 588 Bean Bags (Calculated as 11750/(80-60)=587.5)
A. I decided to produce one type of chair, the one maid with high quality vinyl. I made this decision so we have a quality product but not too expensive like the leather costs.
B. I think the best and cheapest distribution would be from selling onine because the only cost they would occurs from creating a website and shipping fees. I allocated 400 dollars for shipping fees.
C. For the advertising strategy I decided to use 1000 dollars for that and use the radio, at 8-25 dollars per ad I think we could get 2 per month at this rate.
D. I set a price point of 100 dollars so we could keep it in the college student range and at half the price of the ones already being offered.
E. At the 100 dollar price point they