Cupcakes
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Sal's Cupcake Factory (khanacademy.org/down Investment in Factory $1,000,000 Annual Capacity 1,000,000 cupcakes/year Cost per cupcake $ 1.00 Price charged per cupcake $ 3.00 Cupcakes sold in a year 500,000 Revenue 1,500,000 Cost of goods sold (500,000) Gross profit 1,000,000 Overhead (500,000) Operating income 500,000 Capacity utilization 50% Quantity Return on asset 50% 300,000 400,000 500,000 600,000 $1.10 -47% -46% -45% -44% $1.20 -44% -42% -40% -38% $1.30 -41% -38% -35% -32% $1.40 -38% -34% -30% -26% $1.50 -35% -30% -25% -20% $1.60 -32% -26% -20% -14% $1.70 -29% -22% -15% -8% $1.80 -26% -18% -10% -2% $1.90 -23% -14% -5% 4% Price $2.00 -20% -10% 0% 10% $2.10 -17% -6% 5% 16% $2.20 -14% -2% 10% 22% $2.30 -11% 2% 15% 28% $2.40 -8% 6% 20% 34% $2.50 -5% 10% 25% 40% $2.60 -2% 14% 30% 46% $2.70 1% 18% 35% 52% $2.80 4% 22% 40% 58% $1.10 $1.20 $1.30 $1.40 $1.50 $1.60 $1.70 $1.80 $1.90 $2.00 $2.10 $2.20 $2.30 Price/Quant 300,000 400,000
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Transcript of Cupcakes
Sal CupcakesSal's Cupcake Factory (khanacademy.org/downloads/cupcakes.xlsx)Investment in Factory$1,000,000Annual Capacity1,000,000cupcakes/yearCost per cupcake$1.00Price charged per cupcake$3.00Cupcakes sold in a year500,000Revenue1,500,000Cost of goods sold(500,000)Gross profit1,000,000Overhead(500,000)Operating income500,000Capacity utilization50%QuantityReturn on asset50%300,000400,000500,000600,000700,000800,000900,0001,000,000$1.10-47%-46%-45%-44%-43%-42%-41%-40%$1.20-44%-42%-40%-38%-36%-34%-32%-30%$1.30-41%-38%-35%-32%-29%-26%-23%-20%$1.40-38%-34%-30%-26%-22%-18%-14%-10%$1.50-35%-30%-25%-20%-15%-10%-5%0%$1.60-32%-26%-20%-14%-8%-2%4%10%$1.70-29%-22%-15%-8%-1%6%13%20%$1.80-26%-18%-10%-2%6%14%22%30%$1.90-23%-14%-5%4%13%22%31%40%Price$2.00-20%-10%0%10%20%30%40%50%$2.10-17%-6%5%16%27%38%49%60%$2.20-14%-2%10%22%34%46%58%70%$2.30-11%2%15%28%41%54%67%80%$2.40-8%6%20%34%48%62%76%90%$2.50-5%10%25%40%55%70%85%100%$2.60-2%14%30%46%62%78%94%110%$2.701%18%35%52%69%86%103%120%$2.804%22%40%58%76%94%112%130%
Sal Cupcakes
300,000400,000500,000600,000700,000800,000900,0001,000,000Price/Quantity Sensitivity
Competition worksheetSal's CupcakesImran's CupcakesVikram's CupcakesInvestment in Factory$1,000,000Investment in Factory$1,500,000Investment in Factory$500,000Annual Capacity1,000,000Annual Capacity2,000,000Annual Capacity400,000Cost per cupcake$1.00Cost per cupcake$0.90Cost per cupcake$1.10Price charged per cupcake$3.00Price charged per cupcake$3.00Price charged per cupcake$3.00Cupcakes sold in a year500,000Cupcakes sold in a year300,000Cupcakes sold in a year200,000Revenue1,500,000Revenue900,000Revenue600,000Cost of goods sold(500,000)Cost of goods sold(270,000)Cost of goods sold(220,000)Gross profit1,000,000Gross profit630,000Gross profit380,000Overhead(500,000)Overhead(700,000)Overhead(300,000)Operating income500,000Operating income(70,000)Operating income80,000Capacity utilization50%Capacity utilization15%Capacity utilization50%Return on asset50%Return on asset-5%Return on asset16%Aggregate Capacity3,400,000Aggregate Demand1,000,000Aggregate Utilization29%Aggregate Returan on Assets17%
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