- What costs should Riley consider for her food truck venture? What costs are fixed? What costs are variable? Estimate each cost.
Common food truck startup costs include the initial costs such as the cost of the truck, licenses, and permits as well as Daily operating costs such as food costs, staff wages, fuel costs, parking lease cost, market research, advertisement, and insurance (Noreen et al., 2017). These costs can be categorized into fixed and variable costs. While variable costs vary depending on the units produced, fixed costs remain unchanged regardless of production output. In this case, parking lease, insurance cost, cost of the truck, and the cost of acquiring a business permit and a license are fixed costs. Variable costs include food inventory costs, staff wages, fuel costs, and miscellaneous costs.
A simple food-truck, with minimal storage and a mobile kitchen, cost a minimum of $15,000 while its permits and licenses are estimated at $200 (Rockefeller, 2015). The insurance cost for starting a food truck, on the other hand, is estimated at $300. Event parking lease cost is around $200-$1000. In general permits, Licenses, parking, and insurance are estimated at $3500 per year on average. The food inventory cost for cupcakes and coffee can be as high as $20,000 in a month. In this case, it is assumed that the cost of buying the two products is 35% of the selling price held at $3.25 for a cupcake and $2.10 for coffee. Typically labor cost is estimated at $6,757 in a month. The cost of fuel in a month can be as low as $250 while miscellaneous costs are projected at $ 1000 per month. The intended advertisement and marketing research can cost approximately $500 in a year.
- Based on your answer to question #1, what is Riley’s break-even unit for cupcakes and coffee if she expects a 50/50 split between the two? What is she expects that 25% of her sales are cupcakes while 75% are coffee?
The breakeven point in this case refers to the units of coffee and cupcakes that Relay need to see in order to breakeven, that is to make profit with zero losses (Noreen et al., 2017). The significance of calculating the breakeven point is to compare revenue and sales to the costs associated with producing and selling goods or services. The breakeven point is calculated using the following formula:
Fixed costs=$3500+$15,000= $18, 500
The sales price per unit is calculated as follows:
(Sales price of a cupcakes x Sales percentage of cupcakes) + (Sales price of coffee x Sales percentage of coffee) = ($3.25 x 0.5) + ($2.10 x 0.5) = $ 2.675
or ($3.25 x 0.25) + ($2.10 x 0.75) = $ 2.3875
The variable cost per unit is worked out as follows:
(Variable expense of cupcakes x Sales percentage of cupcakes) + (Variable expense of coffee x Sales percentage of coffee) = (0.35 x $3.25 x 0.5) + (0.35 x $2.10 x 0.5) = $ 0.93625
Or (0.35 x $3.25 x 0.25) + (0.35 x $2.10 x 0.75) = $ 0.835625
BEP = 18,500/ ($ 2.675 – $ 0.93625) = 10, 639
or 18,500/ ($ 2.3875 – $ 0.835625) = 11,921
- If Riley’s market analysis indicates that she can sell 2,000 cups of coffee and 3,000 cupcakes monthly, what is her margin of safety?
The margin of safety in accounting refers to the difference between actual sales and breakeven sales (Noreen et al., 2017). The margin of safety is significant in that it enables Relay to estimate the number of sales that she can decrease before the business becomes unprofitable.
Margin of safety =10, 639- (2000+3000) =5,639
or 11, 921- (2000+3000) = 6,921
- Should Riley purchase the food truck? What other factors should she consider?
Riley whose retained earnings from her bakery amount to $5,000 is not in a position to purchase an expensive food truck. Given that there are other costs to cater to such as food costs, licensing, and wages, Relay will be much strained if she takes a loan to buy a new truck. Buying a used food truck will not be good enough either given that it goes for an average cost of $50,000. Relay has two alternatives that include acquiring a food trailer or renting a food truck. However, a food trailer which goes for around $15,000 is disadvantageous because it requires an operational vehicle to move it and, therefore, attracts repair costs (Rockefeller, 2015). The only advantage is that the vehicle can be changed in case of failure to avoid losing on revenue. Nevertheless, the best option for Relay would be to rent a food truck. A rented food truck costs around $2,000 to $3,000 per month which offers a superb starting point that can be managed even with her current savings (Rockefeller, 2015). Most of the rented trucks come with a commissary kitchen included and it will save in maintenance and repair costs. Again, Relay will be able to test her idea before considering a massive investment.
Noreen, E. W., Brewer, P. C., & Garrison, R. H. (2017). Managerial Accounting for Managers. College Ie Overruns.
Rockefeller, J. (2015). How to Start a Successful Food Truck Business. J.D. Rockefeller.
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!