Selling price per large Snowie $ 5.00 Ice per Snowie $ 0.20 Spoon straw (need one per Snowie) $ 0.02 Styrofoam cup (need one per Snowie) $ 0.08 Napkin (need two per Snowie) $ 0.02 Servings per gallon of syrup 28 Cost per gallon of syrup (includes concentrate, preservative, and sugar) $ 8.00 Hourly rate for workers $ 10.00 Event registration fee per day $ 25.00 Electricity, insurance, maintenance, and permit costs per month $ 250.00 Kiosk rental cost per month $ 650.00 Purchase cost of two ice shavers (5-year life) $ 3,180.00 Purchase cost of a flavor station (5-year life) $ 1,080.00 a. Number of days you anticipate opening the kiosk per month 20 b. Number of hours you will work (no wages required) per day 6 c. Number of hours you will pay an employee to work in the kiosk per day 8 d. Number of Snowies you estimate you will sell on an average day 69 Create a Budgeted contribution margin income statement for one month Sales revenue Less variable expenses: Ice expense Spoon straws Styrofoam cups Napkins Syrup Total variable expenses Total contribution margin Less fixed expenses: Wages for workers Event registration fees Kiosk rental cost Depreciation - ice shavers Depreciation - flavor station Total fixed expenses Operating income

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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Selling price per large Snowie	$ 5.00

Ice per Snowie	$ 0.20
Spoon straw (need one per Snowie)	$ 0.02
Styrofoam cup (need one per Snowie)	$ 0.08
Napkin (need two per Snowie)	$ 0.02
Servings per gallon of syrup	28
Cost per gallon of syrup (includes concentrate, preservative, and sugar)	$ 8.00
Hourly rate for workers	$ 10.00
Event registration fee per day	$ 25.00
Electricity, insurance, maintenance, and permit costs per month	$ 250.00
Kiosk rental cost per month	$ 650.00
Purchase cost of two ice shavers (5-year life)	$ 3,180.00
Purchase cost of a flavor station (5-year life)	$ 1,080.00

a. Number of days you anticipate opening the kiosk per month	20
b. Number of hours you will work (no wages required) per day	6
c. Number of hours you will pay an employee to work in the kiosk per day	8
d. Number of Snowies you estimate you will sell on an average day	69

Create a Budgeted contribution margin income statement for one month

Sales revenue

Less variable expenses:

Ice expense

Spoon straws

Styrofoam cups

Napkins

Syrup

Total variable expenses

Total contribution margin

Less fixed expenses:

Wages for workers

Event registration fees

Kiosk rental cost

Depreciation - ice shavers

Depreciation - flavor station

Total fixed expenses

Operating income

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