Question

Data: Selling price per large Snowie 5$

Ice per snowie (need one per servin)$0.2

Spoon straw (need one per serving)$0.02

Napking(need two per snowine) $0.01

Serving per gallon of syrup $28

Cost per gallon of syrup (includes concentrate, preservative, and sugar) $4.25

Hourly rate for workers $10

Even registration fee per day $25

Electricity, insurance, maintenance, and permit cost per month $250

Kiosk rental cost per month (12 month) $650

Purchase cost of two ice shavers (5 year life) $3180

Purchase cost of flavor station (5 year life) $1080

Number of days you anticipate opening the kiosk per month 20

Number of hours you will work (no wages required) per day 6

Number of hours you will pay an employee to work in the kiosk per day 8

1. Number of days you anticipate opening the kiosk per month 20
2. Number of hours you will work( no wages required) per day 6
3. Number of hours you will pay an employee to work in the kiosk per day 8
4. Number of Snowies you estimate you will sell on average day 69

Question:

Syrup cost per snowie (cost per gallon/Servings per gallon of syrup)

Budget contribution margin income statement For the month ended July 31

Sales revenue from October 6900

Less variable expenses: Ice expense, Spoon straws, Styrofoam cups, napkins, syrup

Total variable expenses $ - No need

Total contribution margin $6900

Less fixed expenses: Wages for workers, event registration fees, kiosk rental cost, Depreciation – ice shavers, Depreciation flavor station

Total fixed expense $- No need

Oparating income $6900

Answer 1

(1) Syrup cost per snowie

= (cost per gallon/Servings per gallon of syrup)

=$4.25/28

=$0.15

(2)

variable costs

ice per snowie	$0.2
Napkin	$0.02[$0.01*2]	Need two per snowie
Spoon straw	$0.02
Syrup cost	$0.15
Total variable cost per snowie	$0.39

wages for worker = $10 per hour*8 hours per day*20 days a month

=$1,600

depreciation ice shavers= cost/useful life/12 months

=$3,180/5 /12

=636/12

=$53

depreciation flavor station = $1,080/5/12

=$18 per month

Budget contribution margin income statement For the month ended July 31

		working
Sales revenue	$6,900	[69 per day*20 days a month*$5]
Less variable expenses
Ice expense	$276	[$0.2*69*20]
Spoon straw	$27.6	[$0.02*69*20]
napkins	$27.6
syrup	$207	[$0.15*69*20]
Total variable costs	$538.2
Total contribution margin	$6,361.8	[$6,900-538.2]
Less: fixed costs
wages for worker	$1,600
Event registration fees	$500	[$25*20]
kiosk rental cost	$650
Electricity, insurance, maintenance, and permit cost per month	$250
depreciation-ice shavers	$53
Depreiction Flavor station	$18
Total fixed expenses	$3,071
Operating income	$3,290.8	[$6,361.8-$3,071]

round off if required.

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