Reference no: EM132478698

Point 1: You own a frozen pizza manufacturing and distribution business. Our premium product, Buzz All Natural Pizza appeals to the adult learners at DeVry University. A marketing survey revealed a time-starved segment that is always in need of energy at the end of the day or week in order to do their schoolwork. Also being poor time managers, this homogenous group requires a more direct form of intervention in order to reach peak academic performance. In order to meet this need, your pizza has tomato sauce.

The Operating Budget

Point 2: Input the sales volume, as projected by your Field Sales managers. The sales manager has provided the following sales estimates and price points for the first quarter of 2020. Input these values in the worksheet labelled

Question 1: Input your forecast product mix, as provided by the Marketing Department. There is much debate as to the probable sales mix between the two sizes. Assume that an equal number of large and medium size pizzas will be sold (make sure these two add up to 100%).

Question 2: Input the efficiency rate for your direct labor, as projected by the VP of Manufacturing. Direct labor consists of your Pepe, who has agreed to a low wage as long as and bathroom breaks are included. DO NOT CHANGE THIS LABOR RATE. However, you must calculate the chef's efficiency rate. Assume that it takes 15 minutes to make a pizza from order to box. Input your standard rate of how many minutes it will take to make one pizza from order to box.

Question 3: Input the sales commission, as provided by the VP of Sales and the department's fixed costs. Ingredient and material costs, based on quotes after an extensive request for proposal (RFP), are good for two years. DO NOT CHANGE THE DIRECT MATERIAL RATES. The only variable selling cost is a sales commission based on a percent of sales revenue. The sales commission rate should be 1% of sales revenue.

Question 4: Input the administrative fixed costs as provided by the CFO. Selling expenses include a fixed component for the sales manager's salary and car allowance for any company business use of their personal auto. Fixed selling expense for January should be $50,000 and fixed administration expense for January should be $60,000.

Question 5: Calculate the break-even sales for January.

Question 6: Calculate sales volume needed to make $200,000 in net income for January.