Peter Piper's Pies Homework

Info:                                                     

Lemon pie raw goods cost $0.25 to make             

Blueberry pie raw goods cost $0.75 to make       

Strawberry pie raw goods cost $0.50 to make    

You sell 1250 Lemon, 1000 Blueberry and 1500 Strawberry pies each month

Lemon pies sell for $1.29, Blueberry pies sell for $1.49 each and Strawberry pies sell for $1.69

You spend $150 dollars a month on a truck banner to advertise your pies.

Each pie's package costs $0.08                   

You take a salary of $150 per month (about $12/hr.)

Your delivery costs are $20/delivery day (22 days per month)

1. What are your COGS and gross margin?                                                           

2. What is the current profit/loss for this business?

3. If you want to make more profit, which type of pie should we try to sell more of?

4. If you could reduce your raw materials cost by $0.10, what would your new profit/loss be?

Summary:  Answer the three questions and develop the spreadsheet to support your answers.  Attach a hard copy of your spreadsheet to your answers and bring to class.