Cassandra’s Hot & Tasty Pretzels

Mission Statement

Cassandra Simmons

ACC 302: 8925

Darnell Wilson

1/8/14

Mission Statement

Name of the company:  Cassandra’s Hot & Tasty Pretzels

Vision:

·         Continue to satisfy my customers to the best of my abilities

·         Continues to strive highly towards success

·         Expand my pretzel business globally

Core Competencies:

·         More varieties of pretzels

·         Lowest prices on pretzels

·         Most natural tasting pretzels

Pretzel Recipe: Angel Soft Pretzels

4 Teaspoons of active dry yeast

1 Teaspoon of white sugar

1 ¼ Cups of warm water (100 Degrees F/45 Degrees C)

5 Cups of all-purpose flour

½ Cup of white sugar

1 ½ Teaspoon of salt

1 Tablespoon of vegetable oil

½ Cup of baking soda

4 Cups of hot water

¼ Cup of Kosher salt (For Topping)

Description of Primary Customers: Children, Teens, & Adults

·         Children typically love things that are sweet and soft

·         Teenagers of this generation love food that won’t take forever to make and food that you can eat right away

·         Adults love food that they can eat on the go because of their busy schedules

Short Answer Questions:

·         Exhibit 1 on the ACC 302 Final Project Handout presents your expenses in the categories of raw materials, manufacturing overhead, and operating expenses. What factors make each of the categories different? Also, list the types of cost that your company will classify as overhead.

Direct materials are the costs of all materials that are an integral part of a finished product and that have a physical presence that is readily traced to that finished product. Manufacturing overhead is everything (all costs) except direct labor, direct materials, administrative costs, and marketing costs. Operating expenses are the expense of maintaining property, paying property taxes and utilities and insurance. It does not include depreciation or the cost of financing or income taxes. My company’s list of overhead will be Utilities, Other indirect materials and labor, Maintenance, Depreciation, and Supervision plus the Total of all that combined.

·         Exhibit 1 on the ACC 302 Final Project Handout also indicates which costs are fixed and which costs are variable. For each expense listed, indicate why it would be categorized as fixed or variable.

Sales Commission and the Shipping Cost are marked as variable because the commission and the shipping cost would depend on the productivity of the business during that period.

Salaries, Depreciation and Other are marked as Fixed because those things are needed to run the business each month and they have to be paid even if the business isn’t making enough money.

·         What is sensitivity analysis? How does the use of spreadsheets aid in the application of sensitivity analysis?

Sensitivity analysis is a way to predict the outcome of a decision if a situation turns out to be different compared to the key predictions. Spreadsheets aid in sensitivity analyses by allowing us to run multiple versions of key assumptions through a model and present the effect on the key outputs.

Total Variable Cost per Dozen Pretzels is $2.75 x 12 = $33.00

Sales Price Per Dozen 120% Markup = $39.6

Contribution Margin = $30.25

Breakeven Points in Dollar and Units = $396.69

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