Rasmussen College Financial Section of Cooking Baking Business Research Paper

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yvazra

Business Finance

Rasmussen University

Description

I'm needing a full paper written with the following criteria:

NO PLAGIARISM, APA FORMAT, AND CREDIBLE SOURCES/REFERENCES, FOLLOW GRADING RUBRIC

Competency

Analyze leverage and activity ratios to review operating performance across organizations.

Scenario

At a recent get together, a longtime friend brought various types of cookies as a dessert. You had never tasted cookies of this high caliber before. Your friend never thought anything special of the cookies given she has been baking these since she was a small child. You shared that “Cookies from Home,” a profitable company based in Tempe, Arizona, started by the encouragement of friends. Intrigued, your friend stated she would like to learn more. She would like some assistance in understanding how to start and operate a business of this nature. In exchange for a 2% ownership in the company, you agree to help her develop a business plan so that she can start her own business baking, marketing, and selling these cookies.

Instructions

Write the portion of the business plan for this company addressing the following:

  • Explain the process of determining the breakeven point for a business.
  • Estimate monthly fixed costs to establish this company including equipment, rent, insurance, and other fixed costs.
  • Estimate variable costs per batch of cookies, identifying all variable costs.
  • Given the estimated costs, calculate the breakeven point and identify required sales revenue to reach this point.
  • Based on the costs identified above, develop a realistic proforma income statement of a profitable business venture which would pay your friend a salary of $ 50,000 per year.

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Grading Rubric *Accurately and eloquently explains the process of determining the breakeven point for a business *Accurately estimates monthly fixed costs including equipment, rent, insurance, etc. *Accurately identifies all variable costs per batch of cookies *Accurately calculates the breakeven point and identifies required sales revenue to reach breakeven *Precise and accurate proforma income statement resulting in a highly accurate projection
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Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.Hi there. ✋ Please see attached the answer to your question, as well as an outline of the answer.Kindly let me know if you want any corrections made, even after the deadline. Thanks for choosing me to work with you. 🙏

Financial Section of Business Plan for Cookie Baking Business
Thesis Statement: Break-even analysis can be used to achieve a desired net profit for a business
by targeting its sales levels and output levels.
I.
II.
III.

Assumptions underlying the financial projections used
Direct and indirect cost analyses and projections
Break-even analysis
A. Method of estimating break-even point
B. Estimation of break-even quantity of cookie business
C. Estimation of break-even sales of cookie business

IV.
V.

Revenue projections for owner’s target salary
Tentative pro-forma income statement for owner’s target salary


FINANCIAL SECTION OF
BUSINESS PLAN
COOKIE BAKING BUSINESS

1. ASSUMPTIONS UNDERLYING THIS FINANCIAL PLAN

The following assumptions are made and result in the figures produced in the Cost and Revenue
projections, as well as in the resulting pro-forma income statement.
1. The plan is to produce a variety of soft-baked cookies in order to cater to as wide a customer
base as possible. They will all be in 16-oz or 1 pound packs, with a brand price of $4.99 per
pound for all flavors (although their costs per pack will be different for the different varieties,
as shown in the cost projection in Table 1).
2. The varieties will not be seasonal flavors, but flavors whose demand levels are relatively
popular and stable all-year round. This assumption implies that the same batch quantity of
each variant will be produced each month of the year. The different variants in their order of
popularity are as follows:
• Chocolate Chip cookies,
• Vanilla Milk cookies,
• Gingerbread cookies,
• Peanut Butter cookies, and,
• Oatmeal cookies.
3. Relatively more quantities of the more popular variants will be produced. This is reflected in
Table 2 under revenue and sales projections.
4. Production can only be done in batches of 500lb or about 8,000oz worth of cookies in order
to reduce costs per pound of cookies produced. Therefore, the batch numbers represent the
units produced in this financial plan.
5. With respect to sales, occasional discounts and promos will be carried out as a marketing
strategy, to the tune of 1% of total sales revenue. These are deducted from total sales
revenue to get net sales.
6. Capital is raised from personal savings, as well as from contributions from family and
friends in exchange for a minimum percentage ownership in the business. Hence, there are
no interest expense payments on loans.
7. Net profits earned after deducting direct and overhead expenses all belong to the owner of
the business. Hence her target salary of $50,000 will be reflected in net earnings of $50,000
on the pro-forma invoice.

2.

Direct and Indirect Cost Projections

T...


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