casual comfort case

Jaquita Welch
Casual Comfort
MGT 440
October, 2, 2014

1. Pro Forma Income Statement

REVENUE
1998/1999

Gross sales
$30000

Less sales returns and allowances
0

Net Sales
30000

Total Cost of Goods Sold
$18000

Gross Profit
$12000

OPERATING EXPENSES

Selling

Salaries and wages
$10,000

Office Supplies
50

Advertising
1000

Depreciation
0

Shipping
400

Total Expenses
$11450

General/Administrative

Employee benefits
4

Payroll taxes
2

Insurance
6

Rent
8

Utilities
2

Depreciation & amortization
3

Total General/Administrative Expenses
$300

Total Operating Expenses
$11750

Net Income Before Taxes
$250

Taxes on income
250

Net Income After Taxes
$00

NET INCOME
0

If it costs $60 to produce a bean bag with high quality Vinyl, and there are fixed costs of $205, the break-even point for selling the widgets would be:
If selling for $100: 294 Bean Bags (Calculated as 11750/(100-60)=293.75)
If selling for $80: 588 Bean Bags (Calculated as 11750/(80-60)=587.5)

A. I decided to produce one type of chair, the one maid with high quality vinyl. I made this decision so we have a quality product but not too expensive like the leather costs.
B. I think the best and cheapest distribution would be from selling onine because the only cost they would occurs from creating a website and shipping fees. I allocated 400 dollars for shipping fees.
C. For the advertising strategy I decided to use 1000 dollars for that and use the radio, at 8-25 dollars per ad I think we could get 2 per month at this rate.
D. I set a price point of 100 dollars so we could keep it in the college student range and at half the price of the ones already being offered.
E. At the 100 dollar price point they