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Question 2
Joe is the new product manager at a chain of take-away food stores. He is planning to introduce a new type
of fast food a pizza or a curry. He has two product options but the business can only afford to buy the
equipment and advertising material needed for one of these options.
He has undertaken some market research and forecasted the main costs for the two product options.
He has asked you to help him complete the following tables.
Forecasts for one year Pizza option Curry Option
Sales Revenue 50,000 units @ $ 3 40,000 units @ $ 5
Cost of Goods Sold Unit cost of $ 1 each Unit cost of $ 2 each
Gross Profit
Annual equipment costs $ 13,000 $ 12,000
Ravi Sir and Sanjeev Sirs Nimble Education for Commerce and Humanities
ICSE,ISC,CBSE,IGCSE,AS & A,IBDP
Contact 9033311500, 8866611600
Ravi Sir and Sanjeev Sirs Nimble Education for Commerce and Humanities
ICSE,ISC,CBSE,IGCSE,AS & A,IBDP
Contact 9033311500, 8866611600
Annual advertising costs $ 15,000 $20,000
Other expenses $ 13,000 $ 15,000
Net Profit
(a)Fill in the totals for the sales revenue and the cost of goods sold. [4]
(b)Calculate the gross profit and net profit of both product options. [4]
(c)Identify and explain two other factors Joe should consider before making the decision. [4]
(d)Joe finally decides on the curry option. After one year, he finds that profit from this product is much lower
than expected. Evaluate two ways which Joe could use to try to increase profits from this product. [4]
Question 3
Income Statement or Profit-Loss
Account Balance Sheet
Your goal is to find the Gross and Lists the assets (what you own) and
Net Profit liabilities (what you owe)
Remember the formulas for Gross To find the Working Capital, simply
and Net Profit: subtract current liabilities from
Gross Profit= Revenue cost of sales current assets
Net Profit= Gross Profit- expenses
Using the following data, create an Income Statement for 2013. You will need to calculate the Gross Profit,
the formula is above. Once you have the Gross Profit, you can then calculate the Net Profit.
Use the following data:
(a) 100,000 Income from Sales, 30,000 cost of sales, find the Gross Profit. [1]
Expenses are the following: 30,000 in wages, 10,000 in utilities, 5000 in materials, and 5000 in
advertising.
(b)What is the Net Profit? [1]
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BEST OF LUCK
Ravi Sir and Sanjeev Sirs Nimble Education for Commerce and Humanities
ICSE,ISC,CBSE,IGCSE,AS & A,IBDP
Contact 9033311500, 8866611600