Cost Analysis And Business Planning Write A Paper Between 70

Question

Cost Analysis and Business Planning Write a paper between 700 and 1,000 words addressing the following Provide calculations and a solution for total variable costs, break even in sales volume (number of members), break even in sales (in dollars), and margin of safety. Respond to the questions included with the case study. Assume you decide to invest in the franchise. Provide a description and estimates in dollars for monthly sales, variable and fixed expenses. Explain how you determined each number and provide a written list of assumptions. Format the paper consistent with APA guidelines. Deliverables: Paper (MS Word) and Excel File (optional). Review your Originality Report generated from SafeAssign. A new originality report is created with each attempt. Your last attempt is used for grading.

Dr. Jack HW Helper · Accepted Answer

Introduction Cost analysis and business planning are fundamental in establishing the viability and profitability of a new franchise. This paper aims to perform comprehensive calculations related to total variable costs, break-even points, and the margin of safety. Additionally, it evaluates the case study questions and provides a financial projection for potential franchise investment, including assumptions and methodology. Part 1: Cost Analysis and Break-even Calculations Total Variable Costs Calculating total variable costs involves understanding the per-unit cost that varies directly with sales volume. For example, if the franchise’s variable cost per member is $30, and the projected number of members is 500, then total variable costs would be: Total Variable Costs = Variable Cost per Member × Number of Members = $30 × 500 = $15,000 This calculation is crucial because it establishes the baseline for profitability analysis by isolating costs that fluctuate with sales activity. Break-even in Sales Volume (Number of Members) The break-even point indicates when total revenues exactly cover total costs, meaning no net profit or loss. To compute this in terms of membership, we identify the fixed costs and contribution margin per member. Assuming fixed costs of $10,000 per month and a contribution margin of $20 per member (sales price minus variable cost), the break-even sales volume in members is: Break-even Members = Fixed Costs / Contribution Margin per Member = $10,000 / $20 = 500 members This means that selling memberships to at least 500 individuals will cover all costs. Break-even in Sales (Dollars) To convert the membership break-even point into dollar sales: Break-even Sales = Break-even Members × Sales Price per Member If sales price per member is $50: Break-even Sales = 500 × $50 = $25,000 This dollar amount represents the revenue needed to break even. Margin of Safety The margin of safety quantifies how much sales can drop before reaching the break-even poin

Cost Analysis And Business Planning Write A Paper Between 70

Cost Analysis and Business Planning Write a paper between 700 and 1,000 words addressing the following

Paper For Above instruction

Introduction

Part 1: Cost Analysis and Break-even Calculations

Total Variable Costs

Break-even in Sales Volume (Number of Members)

Break-even in Sales (Dollars)

Margin of Safety

Part 1, Section 3: Case Study Questions

Part 1, Section 4: Investment Projection and Assumptions

Conclusion

References