ENTR315 Financing a New Venture Homework- American Military University
Using the breakeven analysis templates and formulas provided with this lesson, along with any other templates you find as your tools, answer the questions below. Answers into a WORD document and answer the questions by number:
I. You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinetmaker approximately 45 minutes to make one cabinet. Each cabinetmaker works an 8-hour day earning $18 per hour. Each cabinet uses $25 in raw materials. You usually produce cabinets 20 days a month and can employ two cabinetmakers. You estimate that your fixed costs are $5,000 per month.
i. What is your contribution margin?
ii. How many cabinets must you make each month to break even?
iii. What is your total monthly revenue if you want to earn a $2,000 profit?
iv. Construct a break-even chart for the custom cabinet firm.
II. Wanda wants to open a health-food store. Her monthly expenses are rent $3,500, utilities of $1,000, insurance of $500, and payroll of $4,250. She estimates that her cost of goods is approximately 65 percent of sales. Wanda would like to make $4,000 a month for herself.
i. What is Wanda's contribution margin?
ii. How much does she need in monthly sales to break even?
iii. How much does she need in monthly sales to make a profit of $4,000?
iv. Construct a break-even chart for Wanda's health-food store
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.