INTRODUCTION Snowie™, owned by Carl and Gordon Rupp, is a company that provides training, equipment, and supplies for operating a shaved ice business. Shaved ice is an ice-based refreshment made by shaving a block of ice into a fluffy, snow-like ice. The product is served in cups with flavored syrups added to the ice. Due to its fine texture, shaved ice absorbs the syrup, making each bite flavorful. Snowie does not sell franchises. It sells a wide array of equipment and supplies, including ice shavers, kiosks, carts, buses, syrups, cups, and other supplies to independent operators. PART 1: COST-VOLUME-PROFIT ANALYSIS FOR A SNOWIE KIOSK Assume that you are evaluating whether to start a Snowie1 business. You could operate a shaved ice kiosk at fairs, downtown areas, and other outdoor events. The kiosk is portable with wheels and a hitch. It has plenty of storage place, work area, electrical outlets, lighting, and a water system. The flavored shaved ice, a “Snowie,” is normally offered in three sizes. For this case, we are going to assume that only one size is offered—the large size, 20 oz. The large Snowie sells for US$4.00. See Table for a list of all costs related to a large size Snowie. In this case, use straight-line depreciation with a fiveyear life and salvage values of zero for both the ice shavers and the flavor station. All monetary amounts in this case are expressed in U.S. dollars. Costs All listed costs relate to the large size Snowie Ice per Snowie $0.20 Spoon straw (need one per Snowie) $0.02 Styrofoam cup (need one per Snowie) $0.08 Napkin per sheet (need two per Snowie) $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 1. Assumptions (to be filled in): a. Number of days you anticipate opening the kiosk per month b. Number of hours you will work (no wages required) per day c. Number of hours you will pay an employee to work in the kiosk per day
INTRODUCTION
Snowie™, owned by Carl and Gordon Rupp, is a company
that provides training, equipment, and supplies for operating
a shaved ice business. Shaved ice is an ice-based refreshment
made by shaving a block of ice into a fluffy, snow-like ice.
The product is served in cups with flavored syrups added to
the ice. Due to its fine texture, shaved ice absorbs the syrup,
making each bite flavorful. Snowie does not sell franchises.
It sells a wide array of equipment and supplies, including ice
shavers, kiosks, carts, buses, syrups, cups, and other supplies
to independent operators.
PART 1: COST-VOLUME-PROFIT ANALYSIS FOR A
SNOWIE KIOSK
Assume that you are evaluating whether to start a Snowie1
business.
You could operate a shaved ice kiosk at fairs, downtown areas,
and other outdoor events. The kiosk is portable with wheels
and a hitch. It has plenty of storage place, work area, electrical
outlets, lighting, and a water system. The flavored shaved ice,
a “Snowie,” is normally offered in three sizes. For this case, we
are going to assume that only one size is offered—the large size,
20 oz. The large Snowie sells for US$4.00. See Table for a list of
all costs related to a large size Snowie.
In this case, use straight-line
and the flavor station. All monetary amounts in this case are
expressed in U.S. dollars.
Costs
All listed costs relate to the large size Snowie
Ice per Snowie $0.20
Spoon straw (need one per Snowie) $0.02
Styrofoam cup (need one per Snowie) $0.08
Napkin per sheet (need two per Snowie) $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
| 1. Assumptions (to be filled in): |
| a. Number of days you anticipate opening the kiosk per month |
| b. Number of hours you will work (no wages required) per day |
| c. Number of hours you will pay an employee to work in the kiosk per day |
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