You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 210 hours per month and charge your customers $23 per hour. Your anticipated costs include: Advertising $47.00 per month Gas $1.50 per hour Depreciation Assistant's Wages $25.00 per month $10.00 per hour Miscellaneous Expenses $940.00 per month Calculate your budgeted Total Contribution Margin on the contribution margin income statement.

You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 210 hours per month and charge your customers $23 per hour. Your anticipated costs include: Advertising $47.00 per month Gas $1.50 per hour Depreciation Assistant's Wages $25.00 per month $10.00 per hour Miscellaneous Expenses $940.00 per month Calculate your budgeted Total Contribution Margin on the contribution margin income statement.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

See similar textbooks

Similar questions

(Appendix 11A) Cycle Time and Velocity, Manufacturing Cycle Efficiency A company like Kicker performs warranty repair work on speakers in a manufacturing cell. The typical warranty repair involves taking the defective speaker apart, testing the components, and replacing the defective components. The maximum capacity of the cell is 1,000 repairs per month. There are 500 production hours available per month. Required: 1. Compute the theoretical velocity (per hour) and the theoretical cycle time (minutes per unit repaired). 2. Speaker repair uses 4 minutes of move time, 10 minutes of wait time, and 6 minutes of inspection time. Calculate the MCE. 3. Using the information from Requirement 2, calculate the actual cycle time and the actual velocity for speaker repair.
QUESTION 9 You plan on starting a lawn mowing business by investing $700 of your own money and purchase $500 of equipment. You plan to work 260 hours per month and charge your customers $22 per hour. Your anticipated costs include: Depreciation Advertising Gas Assistant's Wages Miscellaneous Expenses $25.00 per month $26.00 per month $1.20 per hour $8.00 per hour $20.00 per month Calculate your Variable cost per hour on the budgeted contribution margin income statement. 1
question 15 After spending a year and $49,000,you finally have the design of your new product ready. In order to start production, you will need $31,000 in raw materials and you will also need to use some existing equipment that you've fully depreciated, but which has a market value of $103,000. Your colleague notes that the new product could represent 10% of the company's overall sales and that 10% of overhead is $60,000. Your tax rate is 25%.As you start your analysis of the product, what should be your initial incremental free cash flow? The initial incremental free cash flow is $________.(Round to the nearest dollar. Be sure to use a negative sign if the answer is negative.)
Parsa Real Estate Parsa Real Estate is a company that buys and rents real estate. The company is looking into buying an office building for $1M. The building has 10,000 square feet of rentable office space. The company analysts predict that they can rent the office space for $6 per square foot per month, but demand is a function of price in the following way: % Occupied = 2 - 0.2*Rent (Rent is in dollars per square foot per month. Also, at $6.00, Oscar thinks he can fill about 80% of the office space.) The building needs to be maintained (security, insurance, maintenance, etc.), which costs $10,000 per month regardless of occupancy. Also, there is a variable cost of $2 per month for each square foot occupied. Define the return on invested capital as the ratio of the profits (PER YEAR) and the invested capital. You can draw an ROIC tree in the same way that we drew a KPI tree in class. Simply have the ROIC as “the root” of the tree instead of profits. Then answer the following question.…
Parsa Real Estate Parsa Real Estate is a company that buys and rents real estate. The company is looking into buying an office building for $1M. The building has 10,000 square feet of rentable office space. The company analysts predict that they can rent the office space for $6 per square foot per month, but demand is a function of price in the following way: % Occupied = 2 - 0.2*Rent (Rent is in dollars per square foot per month. Also, at $6.00, Oscar thinks he can fill about 80% of the office space.) The building needs to be maintained (security, insurance, maintenance, etc.), which costs $10,000 per month regardless of occupancy. Also, there is a variable cost of $2 per month for each square foot occupied. A)What is the ROIC? (Please give your answer in decimal form. For example, 0.25 for 25%) B) What would be the new ROIC be if Parsa Real Estate decides to charge rent of $8.00 per square foot per month? (Please give your answer in decimal form. For example, 0.25 for 25%)
You have a lawn mowing business. You plan to work 250 hours per month and charge your customers $22 per hour. Your anticipated costs include: Advertising $25 per month Gas $1.50 per hour Depreciation on mowers $25 per month Assistant's Wages $7.00 per hour Miscellaneous Expenses $50 per month You plan on paying 60% of your monthly costs in the month incurred, 30% in the second month and the remainder in the following month. Calculate the amount of cash payments for operating activities in your second month of business.
1) Margin at the Kiosk You rent a kiosk in the mall for $300 a month and use it to sell T-shirts with college logos from colleges and universities all over the world. You sell each T-shirt for $25, and your cost for each shirt is $15. You also pay your salesperson a commission of $0.50 per T-shirt sold in addition to a salary of $400 per month. Construct a contribution margin income statement for two different months: in one month, assume 100 T-shirts are sold, and in the other, assume 200 T-shirts are sold.
Q1. The monthly fixed costs of operating a 20 room motel are $28,000. The price per room per night ( or per unit) is set at $110. The variable cost per day, per room ( or per unit) is $12 for maid service, $6 for toiletry supplies and laundry, and $6 for heat and utilities. a. Find the break-even quantity ( or Q) for a month for the motel.(Hint: Round off the Q) b.The owner is planning to reduce his price to $ 100 per room per night; what is his profit for the month assuming all rooms are occupied? ( Hint: One month has 30 days)
17. You run a nail salon. Fixed monthly cost is $5,674.00 for rent and utilities, $6,248.00 is spent in salaries and $1,506.00 in insurance. Also every customer requires approximately $4.00 in supplies. You charge $114.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,610.00, salaries to $6,327.00 and insurance to $2,438.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $172.00 per service. At what point will you be indifferent between your current location and the new location?
A sales engineer of a lubricant comрany receives Ρhр 14,580.00 every month. A 9.5 % commission on his monthly sales of Ρhр 85,000.00 is his benefit. His sales last month was Ρhр 115,750.00 and this month is Ρhр 72,951.00.Comрute his two months earnings?
Question 4.1 Hotel+ is considering building a budget hotel that offers clean small rooms with bathrooms. The company anticipates that 120 rooms will rent for 39,600 room-nights per year. The market price for equivalent rooms is $60 per night. Hotel+ estimates that the capital cost will be $6,500,000 and the company would like an annual return of 10%. Following are the estimated annual operating costs: Variable operating costs $ 21 per room night Fixed costs: Salaries and wages $ 420,000 Building maintenance 89,000 General administration 280,000 Total fixed costs $ 789,000 Required What is the full cost per room-night? Can Hotel+ meet the targeted return on investment based on the estimated costs and revenue? Show your calculations. A tour operator has offered $30 per night for 20 rooms during a time of the year that there…
Q1 Bauss Company, a manufacturer of bicycles, started its production in December 2019. For the preceding 5 years Boss Co. had been a retailer of bicycles. After a thorough survey of bicycles markets, management of the Bauss Co. decided to turn its retail store into a bicycles manufacturing factory. Cost of steel frame for a bicycles will total to $80 per unit. The cost of tires for every bicycle would be $25. Workers on the production lines are on average paid $35 per hour. A bicycle usually takes 8 hours to complete. In addition, the rent on the equipment used to assemble bicycle amounts to $6,000 per month. Indirect materials cost $7 per bicycle. A supervisor was hired to oversee production; her monthly salary is $3,500. Factory cleaning costs are $1,500 monthly. Utility costs amounts to $250 per month. Advertising costs to sell bicycles will be 10,500 per year. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $9,900 per…