You wanted to join a booth fair, and you are aiming to get a profit that is twice asyour capital. Your starting capital is P15,000.00. Make a financial plan for the booththat you will set up and the product that you will sell. You may use the sample planbelow:FINANCIAL PLANProduct:Description of product:Goal:Capital: P15,000.00Fixed Cost (Labor, Machineries, Expenses for the booth etc):Variable Cost (Materials, Ingredients, etc):Profit function:Prove that profit function will yield an amount that is twice the capital
Answer (1)
Answer:Financial Plan for Booth Fair: A Sweet Journey with Dessert CupsProduct: Dessert CupsDescription of Product:Our product will focus on gourmet dessert cups featuring a variety of flavors including chocolate mousse, strawberry shortcake, and mango parfait. Each dessert will be layered beautifully in transparent cups, allowing customers to see the vibrant colors and textures. The cups will cater to different dietary preferences, offering options like gluten-free and vegan desserts.Goal:The primary goal is to achieve a profit that is twice the initial capital of P15,000.00, translating into a target profit of P30,000.00 by the end of the booth fair.Capital:P15,000.00Fixed Costs:Fixed costs are expenses that remain constant regardless of the number of dessert cups sold. Below are the detailed fixed costs associated with setting up our booth:Labor:Staff (2 persons for 3 days at P500/day each): P3,000.00Booth Rental Fee:3-day booth rental: P5,000.00Marketing Materials:Banners, flyers, and signage: P2,000.00Equipment:Basic cooking and serving supplies (mixing bowls, spoons, cups): P1,500.00Miscellaneous Expenses:Utilities and incidentals: P1,500.00Total Fixed Costs: P13,000.00Variable Costs:Variable costs fluctuate based on the number of dessert cups sold, primarily the ingredients and packaging needed for the dessert cups. Here’s the breakdown:Ingredients:Average cost per dessert cup (including cream, fruits, and flavorings): P25.00Expected sales: 200 dessert cups over the event (3 days)Total variable cost for ingredients: 200 cups x P25.00 = P5,000.00Packaging Costs:Cost for plastic dessert cups and spoons: P0.50 per cupTotal packaging cost: 200 cups x P0.50 = P100.00Total Variable Costs: P5,100.00Summary of Costs:Total Fixed Costs: P13,000.00Total Variable Costs: P5,100.00Total Cost: P13,000.00 + P5,100.00 = P18,100.00Pricing Strategy:To achieve our profit goal, we need to set a competitive price for our dessert cups.- Average Selling Price per Cup: P100.00- Expected Sales: 200 cups over the event.Financial Projection:Total Revenue: 200 cups x P100.00 = P20,000.00Total Profit Calculation:The total profit is derived from the total revenue minus total costs.Total Profit = Total Revenue - Total CostsTotal Profit = P20,000.00 - P18,100.00 = P1,900.00Given our goal of P30,000.00 profit after capital doubling, our initial estimates indicate further potential.Adjustments for Profit Maximization:To validate that the profit function can yield twice the capital, we can:- Increase Sales Volume: Boost marketing efforts through social media promotions or limited-time offers during the event.- Bundle Sales: Offer deals (buy 3 for P250.00) to encourage larger purchases.- Enhance Product Line: Introduce premium dessert options with higher margins, increasing the average selling price.Conclusion:While our initial profit projection yields an amount less than twice our capital, these strategies set forth can help maximize our revenue. By actively managing fixed and variable costs while enhancing our marketing and sales strategies, we can achieve our goal of doubling our initial capital by the end of the booth fair. Our sweet journey with dessert cups is poised not only for profitability but also for fulfilling the sweet cravings of our customers!
