Calculate the forecast direct material cash payment by month

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Reference no: EM132595655

Marketing:

You have a segmentation analysis of the lifestyle variables for the adult learners market. The results support the need to invigorate and "refuel" with comfort food that is also nourishing. What better choice for adults than pizza? What will fill this need and differentiate "BUZZ-TIME PIZZA" is the caffeinated tomato sauce.

Operations:

You and a couple of friends will make, bake and deliver made-to-order pizzas, in two sizes. There is room in a garage for refrigeration, preparation tables, and a wood-fired oven. The sales manager will make all deliveries, in their vehicle.

Financing:

Clearly, this is a long-term investment. The three founders, who will each contribute an equal amount, have agreed not to draw a salary for three years. You have hired a sales manager and a part-time office manager.

These deliverables involve preparing the necessary financial budgets in order to satisfy creditors and control business operations.

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 "Operating Budget"

January February March

Number of pizzas 40,000 42,500 45,000

Sales price for large $10.50

Sales price for medium $ 8.50

Question 1: Calculate the breakeven sales as well as the sales needed to make $200,000 in net income.

Question 2: Calculate the forecast direct material cash payments by month.

Reference no: EM132595655

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