Marketing

posted by .

You are interested in opening a SNOW BIZ snow cone shack. The SNOW BIZ company who wants to franchise this business to you has provided the following general information:
Cost to make each snow cone:
$0.25 ice, $0.05 plastic cone holder, $0.03 plastic straw, $0.10 flavoring
Other costs to operate the business:
$4000 rent in for SNOW BIZ shack
$1500 advertising (10 ads at $ 75 each for Montgomery newspaper ad and $75 each for Opelika newspaper ad)
$2500 for equipment (ice makers, refrigerators, etc.)
$ 500 franchise fee
The suggested selling price is $2.50 per cone. You forecast demand to be 10,000 cones for the summer. You pay a 10% commission on each cone sold by your friends who will do all the selling. You pay another 10% royalty on selling price to the SNOW BIZ franchise organization.

A. How many snow cones would you have to sell over the summer to break-even (3 pts)?
B. If you wanted to make $10,000 profit for the summer, how many snow cones would you have to sell (3 pts)
C. If you had the following options, which would you choose and tell me why in writing (4 pts)?
i. You could spend an additional $2000 in rent for a better location to sell an additional 5,000 cones OR
ii. You could drop price by 10% and sell and additional 2,500 cones OR
iii. You could raise price by 50% and sell only 8000 units.

  • Marketing -

    12

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Algebra/Geometry

    I am eating a snow cone in a paper cone with a height of 21cm and the radius of my snow cone ice is 3.25 cm. Find the amount of material needed to make my paper snow cone
  2. Pysc

    Benjamin Whorf argued that because the Inuit have many words for snow, A. they have more ways to describe snow than speakers of other languages. B. they have better perceptual skills than speakers with fewer words for snow. C.they …
  3. english

    “In the snow” is repeated three times in “Scott’s Goodbye.” What meaning might the writer have hoped to convey by repeating this phrase?
  4. Science

    1. Why is ice a faster surface for sleddikng than snow?
  5. English 2b

    Read the paragraph. The snow began falling early in the morning. Tiny, weightless crystals. By early afternoon, the ground was covered with several inches of snow. Snow flurries continued throughout the day. When the evening came, …
  6. Math

    Troy can order a large or small snow cone. There are 16 flavors and 2 toppings from which to choose. How many ways can Troy order a snow cone?
  7. easy math

    Troy can order a large or small snow cone. There are 16 flavors and 2 toppings from which to choose. How many ways can Troy order a snow cone?
  8. Please help -_-

    Troy can order a large or small snow cone. There are 16 flavors and 2 toppings from which to choose. How many ways can Troy order a snow cone?
  9. Math help

    i JUST need help with this question. 16. Elizabeth and Sara were at a carnival. They each got a ticket for the Ferris wheel. Ella got a snow cone, and Margaret got a cotton candy. Ella had a certificate for $5.50 off the cost. Margaret …
  10. Math

    Three neighbors measure the snow in their yards over an entire winter. Manny has 30 inches of snow, Mo has 3.5 feet of snow, and Jack has 1.5 yards of snow. The neighbors want to pile all of the snow into one giant snow pile so they …

More Similar Questions