Empower Snacks Case Study
Reserve
When analyzing Empower Snacks reserves this amount should be projected based on the cash flow projection coving the next 12 months. This amount is calculated based on conservative forecast. As actual results often differ from what’s stated in Empower snacks business plan. Take into account that expenses are usually more predictable than revenue because many are relatively fixed one of the largest expense to consisted is payroll. When unitizing the start-ups cost separate the one-time upfront costs needed before Empower starts production from Empower snacks ongoing operating expenses. When analyzing 12 month projections profit and loss Empower average reserves should be between $1,200 - 1,600.00 months. For detail information refer …show more content…
The first scenario is based on having a supervisor at a lower rate at about $12 an hour. The production labor will be based of $1.22 a unit . This figure is based on doing 150 units in about 8 hours with two employees one at $9.25 rate and other at $11-$12 hourly rate. The sales labor is based off of two employees selling 150 units in 5 hours or one employee selling in 10 hours this can be broken up in different days, does not have to be 5 consecutive hours. Packaging is based off .33 unit with one person packaging 150 units in about 5 1/2 hours. Packaging supplies are estimated at $0.40 per unit, this include brown bag packing at $12 for 50 count total .24 per unit with Vacuum seal bag at .16 per unit. Then transportation is calculated at $0.09 a unit for every hundred and 150 units it will totally $13.50 per batch of 150 units to transport units to location to sell. Fixed costs are based on business license and equipment. Although equipment is one time purchase empower snack will continue to grow. Thru this growth Empower snacks will need to purchase new equipment to keep up with supply and demand. Therefore for new equipment budget it is essential to retain at least a $500 budget fixed cost so empower snack have the ability to buy new equipment each year in the first five years
When analyzing Empower Snacks reserves this amount should be projected based on the cash flow projection coving the next 12 months. This amount is calculated based on conservative forecast. As actual results often differ from what’s stated in Empower snacks business plan. Take into account that expenses are usually more predictable than revenue because many are relatively fixed one of the largest expense to consisted is payroll. When unitizing the start-ups cost separate the one-time upfront costs needed before Empower starts production from Empower snacks ongoing operating expenses. When analyzing 12 month projections profit and loss Empower average reserves should be between $1,200 - 1,600.00 months. For detail information refer …show more content…
The first scenario is based on having a supervisor at a lower rate at about $12 an hour. The production labor will be based of $1.22 a unit . This figure is based on doing 150 units in about 8 hours with two employees one at $9.25 rate and other at $11-$12 hourly rate. The sales labor is based off of two employees selling 150 units in 5 hours or one employee selling in 10 hours this can be broken up in different days, does not have to be 5 consecutive hours. Packaging is based off .33 unit with one person packaging 150 units in about 5 1/2 hours. Packaging supplies are estimated at $0.40 per unit, this include brown bag packing at $12 for 50 count total .24 per unit with Vacuum seal bag at .16 per unit. Then transportation is calculated at $0.09 a unit for every hundred and 150 units it will totally $13.50 per batch of 150 units to transport units to location to sell. Fixed costs are based on business license and equipment. Although equipment is one time purchase empower snack will continue to grow. Thru this growth Empower snacks will need to purchase new equipment to keep up with supply and demand. Therefore for new equipment budget it is essential to retain at least a $500 budget fixed cost so empower snack have the ability to buy new equipment each year in the first five years