The Protein Chocolate Company 2019 sales are $30,046. Sales growth for 2020 is projected to grow 65% given new launches, increased spend and consumer interest. COGS was at 47% for 2019, and 42% for 2020. The brand has had cost savings in raw material purchasing. 2020 will be the first time the brand has spent on advertising with spends of $6,000. Web site costs were $1,390 in 2019 and will increase by 250% in 2020. The brand consistently attends trade shows as a way of reaching retailers. 2019 spend was at $6,500 and this will maintain at $6,500 in 2020. In 2019 the brand had $200 in charitable donations and will not be repeating this in 2020. 2019 Travel $5,786 and this will be reduced to 25% of this number in 2020 Misc $1,071 and this will not reoccur in 2020 Shipping and postage will increase from 13% to 19% as more sales are direct to consumer. Insurance/Other is at $437 and will stay the same in 2020. Broker commission was 1.8% in 2019 and will be increased to 2% in 2020. Office Expenses were $2,131 in 2019 and will stay $ fixed in 2020. 

Develop a financial statement and analyze the following:

1. What are the 2020 Fixed Costs (FC)?
2. What are the 2020 Variable Costs (VC)?
3. What is the breakeven using 2020 information?
4. What sales revenue do they need to breakeven?
5. What is the breakeven with salary and benefits of $23,000?
6. What does this suggest about Protein Chocolate Companies financial information?
7. Do you think they can attain the projected 2020 sales revenue? Why?
8. Is it worth trying to increase sales through increased distribution? Why?
9. Should the Protein Chocolate Company business continue?
10. How would you grow the business?

Answer rating: 100% (QA)

To analyze the financial information for The Protein Chocolate Company in 2020 we need to break down their costs into fixed costs FC and variable costs VC and then calculate the breakeven point using ... View the full answer