Petes pet products is a sole proprietorship owned by pete

Reference no: EM13569776

Pete's Pet Products is a sole proprietorship owned by Pete Thompson. The store provides a full-line of pet products, including food, grooming materials, toys, leashes, etc. The company also sells hand-made pet houses, including dog houses, bird cages, and cat castles. Each of the pet houses is being evaluated in terms of cost-volume-profit. See the relevant information below:

	Dog house	Bird cage	Cat castle
Sales Price	$140	$95	$160
Variable cost	$65	$34	$56
Fixed monthly cost	30%	25%	45%

When Pete uses a distributor to sell additional pet houses, he has to pay a sales commission of 8% of the sales price. On average, he sells 60% of each pet house through distributors. The fixed costs are based on estimated design time for each product. Pete's store averages $32,000 of fixed costs per month.

Refer to the Course Schedule within the Syllabus for specific project deliverables and due dates.

DELIVERABLE

Based on the information presented above, please answer the following questions. Use Excel for this assignment. Complete your calculations using the Excel features and simply type in narrative answers.

	Dog House	Bird Cage	Cat Castle
Sale Price	$ 140.00	$ 95.00	$ 160.00
Variable Cost	$ 65.00	$ 34.00	$ 56.00
Fixed Monthly Cost	$ 9,600.00	$ 8,000.00	$ 14,400.00
Contribution Margin	$ 75.00	$ 61.00	$ 104.00

Total Monthly Fixed Cost


QUESTION 2
	Dog House	Bird Cage	Cat Castle
Break-Even Units


QUESTION 3
	Dog House	Bird Cage	Cat Castle
Sale Price	$ 140.00	$ 95.00	$ 160.00
Variable Cost	$ 65.00	$ 34.00	$ 56.00
Fixed Monthly Cost	$ 9,600.00	$ 8,000.00	$ 14,400.00
Units Sold	750	335	640
Total Sales
Total Sales Through Distributors @ 60%
Sales Commison Paid @ 8%
Contribution Margin


QUESTION 4
	Dog House	Bird Cage	Cat Castle
Sales Commison Paid @ 12%
Differnce between 12% and 8%
Recommended cost changes


QUESTION 5
	Dog House
Sales Price
Variable Cost
Advertisment Monthly
Fixed Monthly cost
Contribution Margin

Reference no: EM13569776

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