# Part 3: Salty Pawz Financial Information

Sales + Revenue: For the last 6 months, Wanda’s sales have broken down as shown below. She has also provided you with her cost for each variety of treat.

 Products/Services % of Sales Sales Price COGS Contribution Profit Margin Weighted Profit Margin Party Pooch 45% 20.00 10.40 9.60 48.00% 21.60% Chicken Cuties 18% 15.00 7.80 7.20 48.00% 8.64% Bison Bites 5% 21.00 10.80 10.20 48.57% 2.43% Lamb Lovies 32% 24.00 12.60 11.40 47.50% 15.20% total 100% Average profit margin: 47.87%
 Sales Price COGS Chicken Cutlets 1.25 0.65 Bison Bites 1.75 0.90 Lamb Lovies 2.00 1.05

Cost of Goods Sold. Wanda’s COGS include the packaging, labeling, the ingredients, and the time it takes to make the treats. Since she can bake them in big batches, her labor cost per unit is very low.

When Wanda ships her products, she charges just what it costs her. Shipping is done on a cost recovery basis and currently she doesn’t consider it in her income/expenses.

Monthly Expenses. Currently Wanda’s monthly expenses are:

 Rent 0.00 Electricity 0.00 Telephone 100.00 Water /Sewer 0.00 Internet 60.00 Website 175.00 Salaries 0.00 Owner's Draw 1000.00 Office Supplies 50.00 Loan Payment 0.00 Insurance 85.00 Other 0.00 Total Overhead $1,470.00 Sales Mix: Currently Wanda’s customers purchase her products at the following ratios:  Products/Services % of Sales Party Pooch 45% Chicken Cuties 18% Bison Bites 5% Lamb Lovies 32% Break Even Calculation. Based on her current monthly expenses and sales mix, this is what Wanda has to sell in order to break-even:  Products/Services % of Sales Sales Price COGS Contribution Profit Margin Weighted Profit Marg. Party Pooch 45% 20.00 10.40 9.60 48.00% 21.60% Chicken Cuties 18% 15.00 7.80 7.20 48.00% 8.64% Bison Bites 5% 21.00 10.80 10.20 48.57% 2.43% Lamb Lovies 32% 24.00 12.60 11.40 47.50% 15.20% Total: (Must equal 100%) 100% Average profit margin: 47.87% $$\frac{Total\,Overhead}{Average\,Profit\,Margin}=BREAKEVEN$$ $$\frac{1,470.00}{47.87\%}=3.070.91$$ Average Sales per Customer:$20.00

 Breakeven Party Pooch Chicken Cuties Bison Bites Lamb Lovies Monthly in Dollars $3,070.91$1,381.91 $552.76$153.55 $982.69 In Units 69 37 7 41 Forecasting Supply and Demand. Wanda is at capacity for production out of her kitchen, so she believes that she is at the maximum income she can generate with her current structure. If Wanda changes her pricing structure, the following quantities demanded and quantities supplied will result. Income Information. Here is a summary of Wanda’s Salty Pawz income information for the past 6 months.  INCOME: Party Pooch$ 40,500.00 Chicken Cuties $16,200.00 Bison Bites$ 4,515.00 Lamb Lovies $28,800.00 TOTAL INCOME:$ 90,015.00 COST OF GOODS SOLD: Party Pooch $21,060.00 Chicken Cuties$ 8,424.00 Bison Bites $4,515.00 Canine Craving$ 15,120.00 Total cost of sales $49,119.00 GROSS PROFIT$ 40,896.00 OPERATING EXPENSES: Rent $- Electricity$ - Telephone $600.00 Water /Sewer$ - Internet $360.00 Website$ 1,050.00 Salaries $- Owner's Draw$ 6,000.00 Office Supplies $300.00 Loan Payment$ - Insurance $510.00 Other$ - TOTAL EXPENSES $8,820.00 NET INCOME BEFORE TAXES$ 32,076.00