Paula's Tote Bags: Feasibility Report

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Title: Paula's Feasibility Report Table of Contents 1: Introduction 1.1: Tote Bag Variable Costs 1.1.1:Paula Tote Bag Fixed Costs 1.1.2: Costs of Electricity 1.1.2.1: Lighting consumes power at all times Paula is working 1.2: Potential Problem with the Costs 2: Paula's Annual Breakeven Point 2.1: Annual Breakeven Point in units (bags) 2.2: Annual Breakeven Point in Revenue Dollars 2.3: Breakeven Date 3: Yearly Expected Income 3.1: Suggestion whether to Proceed with the Venture 4: Twelve-month cash flow for Paula Tote Bag 4.1: Findings of the Cash Flow 5: Target Sales to Earn $1,000 Personal Income per Week 6: Conclusions and Recommendations List of Reference 1: Introduction Objective of this assignment is to determine the potential profitability of Paula Tote Bag. To determine the viability of the venture, it is critical to determine the nature of costs and the paper evaluates the viability of business using CVP (cost-volume analysis). The CVP analysis assists in understanding the behavior and nature of entity costs which reveals the method a business is going to perform. (Needles, Powers, & Crosson 2007). To analyze the cost structure of Paula's business, it is critical drill into the specific costs that would be used for the production of Tote bag. The paper uses the variable costs and fixed costs to enhance the greater understanding of the cost structure of the Tote's bag. 1.1: Tote Bag Variable Costs Variable costs are the costs that vary in

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