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Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes?

Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer seaso the business is heavily dependent on the weather and the economy in addition to new competition. Sanjana Sweet, the owner, prepares a budget each year after reading long-term weather forecasts and estimates of summer tourism. The budget is a first ste planning whether she will need any loans and whether she needs to consider adjustments to store staffing. Based on expertise ar experience, she develops the following. Scenario Good Fair Poor Gross Margin per Customer (Price Cost of Poor Fair Good Poor Fair Good Poor Fair Good Sanjana assumes, for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $31,000 plus $2 for every customer in excess of 26,000. The marketing and administrative costs are estimated to be $11,100 plus 3 percent of the gross margin question 7- Home... Required: Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes? Gross Margin $ $ $ $ $ $ Goods) $5.6 4.6 1.8 $ $ 1050 $ 1.8 4.6 5.6 1.8 4.6 5.6 1.8 4.6 5.6 Number of Customers 36,000 26,000 21,000 Number of Customers. 21,000 21,000 21,000 26,000 26,000 26,000 36,000 36,000 36,000 Gross Margin Operating Costs Marketing & Admin Operating Profit (Loss) $ $ $ $ $ $ $ $ $ 0 0 0 0 0 0 0 0 0 < Prev 7 of 17 acer Next >
Transcribed Image Text:Sanjana's Sweet Shoppe operates on the boardwalk of a New England coastal town. The store only opens for the summer seaso the business is heavily dependent on the weather and the economy in addition to new competition. Sanjana Sweet, the owner, prepares a budget each year after reading long-term weather forecasts and estimates of summer tourism. The budget is a first ste planning whether she will need any loans and whether she needs to consider adjustments to store staffing. Based on expertise ar experience, she develops the following. Scenario Good Fair Poor Gross Margin per Customer (Price Cost of Poor Fair Good Poor Fair Good Poor Fair Good Sanjana assumes, for simplicity, that the gross margin and the estimated number of customers are independent. Thus, she has nine possible scenarios. In addition to the cost of the products sold, Sanjana estimates staffing costs to be $31,000 plus $2 for every customer in excess of 26,000. The marketing and administrative costs are estimated to be $11,100 plus 3 percent of the gross margin question 7- Home... Required: Prepare an analysis of the possible operating income for Sanjana similar to that in Exhibit 13.15. What is the range of operating incomes? Gross Margin $ $ $ $ $ $ Goods) $5.6 4.6 1.8 $ $ 1050 $ 1.8 4.6 5.6 1.8 4.6 5.6 1.8 4.6 5.6 Number of Customers 36,000 26,000 21,000 Number of Customers. 21,000 21,000 21,000 26,000 26,000 26,000 36,000 36,000 36,000 Gross Margin Operating Costs Marketing & Admin Operating Profit (Loss) $ $ $ $ $ $ $ $ $ 0 0 0 0 0 0 0 0 0 < Prev 7 of 17 acer Next >
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