To recap, W.T.’s planning on the following: Newspaper ad $120 per month Social media manager $100 per month; $1 per job scheduled Payment collection $0.75 per job Gas $4.00 per job
To recap, W.T.’s planning on the following:
|
Newspaper ad |
$120 per month |
|
Social media manager |
$100 per month; $1 per job scheduled |
|
Payment collection |
$0.75 per job |
|
Gas |
$4.00 per job |
Considering his analysis of similar services and to keep things simple, W.T. plans to price all jobs the same and charge $15 per job. Because of this flat rate, he anticipates he’ll likely need to create different types of “jobs”. For example, purchasing a list of items at the grocery store would be one job, while a bundle of 2-3 small errands such as picking up dry cleaning and prescriptions, might be considered one job. We’ll deal with those details later. For now, assume that all jobs are priced at $15 each and all have the associated variable expenses listed above.
Because this will be a new business, W.T. knows business will likely be slow at the beginning. Complete the following table assuming W.T. completes 10 jobs in a single month.
|
Item |
Per Job |
Total (10 jobs) |
Computations |
|
Sales |
$ |
$ |
|
|
Less: Variable Cost |
$ |
$ |
|
|
Contribution Margin |
$ |
$ |
|
|
Less: Fixed Cost |
$ |
$ |
|
|
Gross Margin |
$ |
$ |
|
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