+1 862 207 3288 Assignment 1: Application of Financial Concepts I
Using the data in the chart below, perform calculations. Show and explain your work. Save the assignment as an Excel file named W4_A1_lastname_firstname.xls, and submit it to the W4: Assignment 1 Dropbox.
1.Group your fixed and variable costs
2.Calculate your break-even point in monthly sales
3.Determine your monthly sales needed to have a contribution margin of $10,000
4.Determine your net income/profit when you have a contribution margin of $10,000
5.Determine your margin of safety based on your monthly sales over the break-even sales.
Your new food service operation has the following expenses:
Salary
$ 3,000.00
per month
Utilities
$ 375.00
per month
Contract Services
$ 575.00
per month
Advertising
$ 190.00
per month
Rent
$ 1,000.00
per month
Insurance
$ 100.00
per month
Accounting and Legal fees
$ 175.00
per month
Permits and Licenses
$ 75.00
per month
Operating Supplies
10%
of monthly sales
Hourly Wages
30%
of monthly sales
Food Cost
25%
of monthly sales
Assignment 1 Grading Criteria
Maximum Points
Grouped fixed and variable costs.
6
Performed break-even analysis and calculated the break-even point.
10
Calculated sales based on targeted contribution margin.
10
Calculated net income/profit given a targeted contribution margin.
10
Calculated the margin of safety based on calculated net income/profit.
4
Total:
40
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