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I have this homework problem that I’m stuck on. Any help would be GREATLY APPRECIATED!
There are 3 parts to it (a,b&c). Again any help will be helpful to me.
Thanks

Purple Cow operates a chain of drive-ins selling primarily ice cream products. The following information is taken from the records so a typical drive-in operated by the company:

Average selling price of ice cream per gallon $16.00
Number of gallons sold per month 3,000
Variable costs per gallon:
Ice cream $5.60
Supplies (cups, cones, toppings, etc.) 2.40
Total variable costs per gallon $ 8.00
Fixed costs per month:
Rent on building $ 2,200.
Utilities and upkeep 760.
Wages, including payroll taxes 4,840.
Manager’s salary, including payroll taxes but excluding any bonus 2,500.
Other fixed expenses 1,700.
Total fixed costs per month $12,000.

Based on these data, the monthly break-even sales volume is determined as follows:

$12,000 (fixed costs) = 1,500 gallons (or $24,000)
$8.00 (contribution margin per unit)

Requirements:
a. Currently, all store managers have contracts calling for a bonus of 20 cents per gallon for each gallon sold beyond the break-even point. Compute the number of gallons of ice cream that must be sold per month in order to earn a monthly operating income of $10,000 (round to the nearest gallon.)

b. To increase operating income, the company is considering the following two alternatives:
1. Reduce the selling price by an average of $2.00 per gallon. This action is expected to increase the number of gallons sold by 20%. (Under this plan, the manager would be paid a salary of $2,500 without receiving a bonus.)

2. Spend $3,000 per month on advertising without any change in selling price. This action is expected to increase the number of gallons sold by 10%. (Under this plan, the manager would be paid a salary of $2,500 without receiving a bonus.)

Which of these two alternatives would result in the higher monthly operating income? How many gallons must be sold per month under each alternative for a typical outlet to break even? Provide schedules to support all of your answers.

c. Draft a short memo to management indicating your recommendations with respect to these alternative marketing strategies.

EDIT: I reread the question and saw that the salary paid on the two new scenarios was no different from the original question, except for the deletion of the bonus. I therefore adjusted my original answer accordingly.

a. Currently, all store managers have contracts calling for a bonus of 20 cents per gallon for each gallon sold beyond the break-even point. Compute the number of gallons of ice cream that must be sold per month in order to earn a monthly operating income of $10,000 (round to the nearest gallon.)

Giving out a $0.20 per gallon bonus, once they have reached the breakeven point, lowers the contribution margin on the additional sales to $7.80 per gallon. The calculation of the additional gallons sold to achieve a $10,000 profit is:

$10,000 / $7.80 = 1,282

1,282 + 1,500 = 2,782 gallons that must be sold to achieve an operating income of $10,000

b. To increase operating income, the company is considering the following two alternatives:

1. Reduce the selling price by an average of $2.00 per gallon. This action is expected to increase the number of gallons sold by 20%. (Under this plan, the manager would be paid a salary of $2,500 without receiving a bonus.)

The thing that makes this problem hard is the fact that they don’t tell you what original sales volume number to use to base the calculations on. So I had to make a guess here, and used the 2,782 gallons they need to sell to earn the $10,000 of operating income.

Under this scenario the contribution margin goes down to $6.00 per gallon sold.

While Fixed costs stay the same at $12,000.

Assuming that the starting number of gallons sold was the 2,782 calculated in the first part, the new number of gallons sold would be 2,782 X 1.20 = 3,338 gallons per month.

Net Profit under this scenario would be:

(3,338 X 6.00) - $12,000 = $8,028

This is a reduction of $1,972 from the $10,000 they earned on the original plan.

2. Spend $3,000 per month on advertising without any change in selling price. This action is expected to increase the number of gallons sold by 10%. (Under this plan, the manager would be paid a salary of $2,500 without receiving a bonus.)

Under this scenario the contribution margin stays the same at $8.00 per gallon sold.

Fixed costs, though, increase to $15,000. ($12,000 + $3,000)

Assuming that the starting number of gallons sold was the 2,782 calculated in the first part, the new number of gallons sold would be 2,782 X 1.10 = 3,060 gallons per month.

Net Profit under this scenario would be:

(3,060 X 8.00) - $15,000 = $9,480

This is a reduction of $520 from the $10,000 they earned on the original plan, but a $1,452 improvement from the other option they are considering

c. Draft a short memo to management indicating your recommendations with respect to these alternative marketing strategies.

You’ll have to write this yourself, but while neither scenario looks good; the second one looks less bad than the first. If it were me, I would recommend that they enact neither of the two choices as both result in a lower profit margin than they already earn

Affiliate programs are companies that pay you a commission when you help them sell their products. You can learn how to easily sell products online that people already want to buy by using any or (most profitably perhaps) all of the following easy to learn methods of Internet marketing:

Creating niche affiliate websites that attract free search engine traffic

Using Pay-Per-Click marketing like Googles Adwords system

Promoting offline by telling your friends, family, and co-workers

Since this article is mainly about introducing you to affiliate marketing, the best way to make a lot of money online is by creating and duplicating niche websites. These are focused websites where you sell a particular product that matches a niche, or audience (such as people wanting to lose weight), and you sell the product under an affiliate program.

Affiliate Marketing is a coin with two individually beneficial sides. On one side, you can sell a product someone really needs, and this transaction will mean that you will have no paperwork or shipping to deal with, and you get a nice commission from the affiliate marketing program.

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The best affiliate programs, by the way, will pay you for the repeat sales from the customer that YOU originally brought them. This is also what the rich call residual income, and residual income should be something you think about when choosing a product to work with. For example, a skin care product would be likely to yield profits again and again as people want to keep using the product to keep their skin clean month after month.

To most effectively promote a product in an affiliate program, the first thing you should do is think of a product you know something about, or are interested in. You should then focus your energy on creating specific niche websites around the topic so you can grow your standing as an expert. Your reputation will help you make more sales.

To create a niche market you create a website with content you either write yourself or outsource, and this website should deal with only a specific, targeted, individual aspect of a larger niche market, such as weight loss (which is very competitive at that level).

Let me explain. If you choose niche markets where there is low competition by other websites for the keywords you base YOUR site on, but there is high search volume, you are almost there. Just use the general niche product and match the product up to the content needs of the people looking for that type of information, and you are practically guaranteed to make money.

This process of selecting niches works better when you find a product you are interested in selling, and working in one niche at a time, such as weight loss. Do not lose track of your goals by constantly trying to find an easier route to riches. Internet marketing takes some time to get up and running but rest assured as you CAN see results.

What you need to do is find the best affiliate programs that sell different products in difference categories or niches to help you make the most money with their program. They should offer you lots of tools, advice, and information about their products, such as articles to use on your sites. Some programs even offer a forum so you can learn from other marketers about what works.

But regardless of how you do it, affiliate marketing is where the biggest money can be earned online. It all boils down to building your own websites around a product, and get traffic to your sites.

Michael Johnson
http://www.articlesbase.com/affiliate-programs-articles/getting-started-with-affiliate-marketing-programs-92832.html

I would also be curious to the total bill for this military action since the beginning?

http://www.costofwar.com/

Those are the direct costs but many estimate the true amount to be 3-4 times that amount due to future costs for the VA, replacement of national guard/reserve equipment, and other future expenses..

Fixed costs per month=Expense

RENT £600
WAGES £400
ELECTICITY £55
INSURANCE £60
LOAN INTEREST £40
MARKETING £45

Total cost:£1200

Question 1: Explain how each of the following methods below can help mia to manage her cash flow.

REDUCE HER DRAWINGS

HIRE RATHER THAN BUY HER PREMISE

HIRE RATHER THAN BUY ALL HER FURNITURE

EMPLOY AN ASISTANT ONLY DURING THE BUSY MONTHS

NOT TAKE OUT A LOAN

SPEND LESS ON MARKETING

PAY FOR LESS HER PURCHASES ONE MONTH AFTER SHE HAS RECEIVED THEM

ARRANGE AN OVERDRAFT FROM BANK

Question 2
For the months when mia closing balance is negative you must suggest at least two different ways in which mia can manage her cash flow.You must explain the advantages and disadvantages of each method and then make a judgement on what course of action you think is the best to manage mia’s cash flow effectively.

just go on betdaq or betbull , and be a taxfree bookie

thats where the money is , no tax , no electric , no wages , BIG BIG MONEY JUST GETTING THROWN AT YOU ALL DAY EVERY DAY

http://www.betdaq.com/UI/?h=1

http://www.betbull.com/UI/Default.aspx

IM ON 3 GRAND A WEEK FOR SITTIN ON MY ASS AT HOME GETTIN HIGH, LISTENING TO MUSIC

IM JUST A SMALL FISH

THE CLEVER ONES ARE ON 15 GRAND A DAY

As far as you people that believe the war is based on oil and President Bush and friends getting rich off the oil, how can this fiscally happen? Bush and Co are AMERICAN oil producers. To make a profit, they must sell AMERICAN oil, and reduce the incoming foreign oil. So if Bush and Co bring in FOREIGN oil, that lowers the cost per barrel of AMERICAN oil, therefore cutting the AMERICAN oil producers’ profits. Please explain your beliefs that he will profit from this action.
WMDs and Michael Moore?
Iraq’s arsenal of weapons of mass destruction was not captured by US forces who heroically brought down Saddam Hussein’s regime three years ago this week. It vanished before they arrived.
Israeli intelligence reported before the US-led invasion that starting in late summer 2002 Saddam’s WMD arsenal was shipped by truck convoy to Syria. Recently, documents seized from Iraq after the fall of the regime were released to the public. Those documents revealed that under the direct command of former Russian prime minister and KGB boss Yevgeny Primakov, Russian Spetnaz forces oversaw the transfer of Iraq’s WMD to Syria ahead of the US-led invasion. These reports have been corroborated by Saddam’s Air Vice Marshall General Georges Sada.

So rather than being destroyed or secured, Saddam’s WMD arsenal was simply moved from one rogue regime with intimate ties to terror organizations to another rogue regime with intimate ties to terror organizations.
Of course, American Media will NOT report this, it will prove Bush right, and then they would look stupid.
Michael Moore, thanks:
Friday, 23 June 2006
When News Lies
WHEN NEWS LIES
Media Complicity and The Iraq War
By Danny Schechter, The News Dissector
A new book from Danny Schechter offers an up to date indictment of the role media played in promoting and misreporting the war on Iraq. It is an analysis of how and why the media got it wrong that pinpoints the failures of journalism and the collusion of media companies with the Bush Administration. The author of EMBEDDED: Weapons of Mass Deception (Prometheus 2003), an account of the TV coverage of the US invasion, returns with a more comprehensive, updated and insider look at the media complicity that Schechter argues "made the war possible."
"Most of the anti-war movement focused on the crimes of the Bush Administration ignoring the mainstream media, its far more effective accomplice,"
says former network producer Danny Schechter (ABC, CNN). "The government orchestrated the war while the media marketed it. You couldn’t have one without the other."

WHEN NEWS LIES includes the feature -length DVD of the prize-winning film WMD (Weapons of Mass Deception). The book will also include the complete script as well as a discussion of the challenges of exposing media with media with a documentary. It chronicles the media war fought alongside the military campaign and the struggle to stand up for truth.

Source(s):

Google it:

Saddam, WMD, Spetsnaz

http://www.wmdthefilm.com/mambo/index.ph…
And the UN vote against the invasion of Iraq was a NO from Germany, Russia, Chian and France. When our troops entered Iraq and captured NEW equipment, where do you think it was bought from??? Germany, France, China and Russia. Conflict of Interest??? A UN Embargo that did not work.
Oh, and who has made the most money from this war??? Michael moore..and he owns stock in Halliburton also.

You are not going to get an answer out of the people who say that. They can’t explain the things they say, they just know how to say it.

On the flip side, one can make the argument that the reason some countries in the U.N. did not vote to invade Iraq was due to oil. Places like France and Russia have/had oil contracts with Iraq, and if they sanctioned an invasion, it would cost them their contracts.

The simple fact is, the simple minded liberals who make the war for oil claims can’t see past the slogans their hero leaders like michael moore spew out of their mouths.

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melvin, that is not a documentary. That title was removed because it was proven to be full of half truths, and things taken out of context to reach a particular point. Don’t be so naive.

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beren, I suggest you look at this question, and see if the timeline of statements adds up.

http://answers.yahoo.com/question/index;_ylt=AhuC2gSDmgjaTBRASaVYtdXsy6IX?qid=20060626222808AAHcTMM