Assume the Glacier supplier increases the cost of a gallon of the Glacier syrup to $8.00 (from
Question:
Assume the Glacier supplier increases the cost of a gallon of the Glacier syrup to $8.00 (from its original cost of $4.25). In response, you increase the selling price of a large Glacier to $5.00.
Requirements
- Make the following assumptions (for items (a) through (c), re-use your assumptions from Part 1):
- Number of days you anticipate opening the Glacier kiosk per month _____
- Number of hours you will work (no wages required) per day _____
- Number of hours you will pay an employee to work in the Glacier kiosk per day _____
- How many Glaciers you estimate you will sell on an average day _____
- Prepare a budgeted contribution margin income statement for one month using the data given in Part 1 and the assumptions that you listed in Part 3. Provide a separate line for each variable cost and for each fixed cost.
- What other factors should you consider before deciding to start a Glacier business?
Costs
All listed costs relate to the large size Glacier
Ice per Glacier $0.20
Spoon straw (need one per Glacier) $0.02
Styrofoam cup (need one per Glacier) $0.08
Napkin per sheet (need two per Glacier) $0.01
Servings per gallon of syrup 28
Cost per gallon of syrup (includes concentrate, preservative, and sugar) $4.25
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 per month $650.00
Purchase cost of two ice shavers (five-year life) $3,180.00
Purchase cost of a flavor station (five-year life) $1,080.00
Expert Answer:
