The Pet Paradise Pet Shop, specialized in selling pet houses, is currently facing profitability challenges. The founder, Lisa, recognizes your expertise in business knowledge and financial acumen and seeks your advice to determine crucial sales targets for breaking even and achieving specific profit margins. Key Financial Parameters: Fixed Costs: The fixed costs for Pet Paradise Pet Shop amount to $25,000 annually. Variable Costs: The variable cost associated with each pet house sold is $150. Product Price: The selling price for each pet product is $450. Goals for Analysis: Lisa wants to understand the sales targets required to achieve the following financial milestones: a. Break-even Point: Determine the number of pet houses Pet Paradise needs to sell annually to cover the fixed and variable costs, resulting in a break-even situation. b . Profit of $50,000: Identify the sales volume needed to generate a profit of $50,000 after covering fixed and variable costs. c. Profit of $150,000,000: Determine the sales target required to achieve a profit of $150,000, taking into account fixed and variable costs. c. Profit of $250,000,000: Determine the sales target required to achieve a profit of $150,000, taking into account fixed and variable costs. Excel Analysis Using Goal Seek: Utilize Goal Seek in Excel to perform the financial analysis based on the given parameters: Fixed Costs: 25,000 Variable Costs: $150 Product Price: $450 Remember to set up the Excel sheet with the appropriate formulas and use the Goal Seek feature to iteratively determine the required sales volume for each scenario. Save each scenario in separate worksheet. Your insights into these key financial metrics will provide valuable guidance to the Pet Paradise Pet Shop in establishing achievable sales targets and enhancing overall business profitability.
The Pet Paradise Pet Shop, specialized in selling pet houses, is currently facing profitability challenges. The founder, Lisa, recognizes your expertise in business knowledge and financial acumen and seeks your advice to determine crucial sales targets for breaking even and achieving specific profit margins. Key Financial Parameters: Fixed Costs: The fixed costs for Pet Paradise Pet Shop amount to $25,000 annually. Variable Costs: The variable cost associated with each pet house sold is $150. Product Price: The selling price for each pet product is $450. Goals for Analysis: Lisa wants to understand the sales targets required to achieve the following financial milestones: a. Break-even Point: Determine the number of pet houses Pet Paradise needs to sell annually to cover the fixed and variable costs, resulting in a break-even situation. b . Profit of $50,000: Identify the sales volume needed to generate a profit of $50,000 after covering fixed and variable costs. c. Profit of $150,000,000: Determine the sales target required to achieve a profit of $150,000, taking into account fixed and variable costs. c. Profit of $250,000,000: Determine the sales target required to achieve a profit of $150,000, taking into account fixed and variable costs. Excel Analysis Using Goal Seek: Utilize Goal Seek in Excel to perform the financial analysis based on the given parameters: Fixed Costs: 25,000 Variable Costs: $150 Product Price: $450 Remember to set up the Excel sheet with the appropriate formulas and use the Goal Seek feature to iteratively determine the required sales volume for each scenario. Save each scenario in separate worksheet. Your insights into these key financial metrics will provide valuable guidance to the Pet Paradise Pet Shop in establishing achievable sales targets and enhancing overall business profitability.
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6EA: Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in...
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Transcribed Image Text:The Pet Paradise Pet Shop, specialized in selling pet houses, is currently facing profitability challenges. The founder, Lisa,
recognizes your expertise in business knowledge and financial acumen and seeks your advice to determine crucial sales
targets for breaking even and achieving specific profit margins. Key Financial Parameters: Fixed Costs: The fixed costs for
Pet Paradise Pet Shop amount to $25,000 annually. Variable Costs: The variable cost associated with each pet house
sold is $150. Product Price: The selling price for each pet product is $450. Goals for Analysis: Lisa wants to understand
the sales targets required to achieve the following financial milestones: a. Break-even Point: Determine the number of
pet houses Pet Paradise needs to sell annually to cover the fixed and variable costs, resulting in a break-even situation. b
. Profit of $50,000: Identify the sales volume needed to generate a profit of $50,000 after covering fixed and variable
costs. c. Profit of $150,000,000: Determine the sales target required to achieve a profit of $150,000, taking into account
fixed and variable costs. c. Profit of $250,000,000: Determine the sales target required to achieve a profit of $150,000,
taking into account fixed and variable costs. Excel Analysis Using Goal Seek: Utilize Goal Seek in Excel to perform the
financial analysis based on the given parameters: Fixed Costs: 25,000 Variable Costs: $150 Product Price: $450
Remember to set up the Excel sheet with the appropriate formulas and use the Goal Seek feature to iteratively
determine the required sales volume for each scenario. Save each scenario in separate worksheet. Your insights into
these key financial metrics will provide valuable guidance to the Pet Paradise Pet Shop in establishing achievable sales
targets and enhancing overall business profitability.
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