Part 1 Weve already done quite a bit of work on projected costs for My Assistant, so
Question:
Part 1
We’ve already done quite a bit of work on projected costs for My Assistant, so pull out from 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 | $ 9.25 | $92.50 | |
Less: Variable Cost | $5.75 | $57.5 | |
Contribution Margin | $ 3.5 | $35 | |
Less: Fixed Cost | $ | $ | |
Gross Margin | $ | $ |
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta