Module 3

 
This week you will analyze and classify the costs of your cookie company and evaluate contribution margin.

Review your Project Submission from Module 02 ( Attached) where you developed a cost card for your cookie and made a list of potential overhead costs. 

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Create an Excel spreadsheet as outlined below. Be sure that your completed spreadsheet has answers to all the questions below. (Attached is the information needed)

In a table, on the first tab of the spreadsheet, classify your costs as variable, fixed, or mixed. Note: Now that you have a more robust understanding of costs you may need to add some overhead costs to your list. Think about both the ecommerce costs as well as the production facility costs.
On the second tab of your Excel spreadsheet, prepare a high-low analysis of your electric costs using the following data. What is your fixed cost of electricity? What is the variable cost of electricity?
On the third tab of your spreadsheet prepare a daily contribution margin income statement based on your cost card from Module 01. Note: You must make some realistic assumptions about your fixed costs, sales level, and selling and administrative costs. Be sure to list all your assumptions. What is the contribution margin ratio for your cookie?
On the fourth tab of your spreadsheet, calculate the break-even in number of cookies per day. What is the break-even in sales dollars each day? How many cookies must you sell to earn a daily profit of $100? Does this seem realistic?

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