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5. Annie's Canine Creations has just closed the books on their first year of business. Annie...

5. Annie's Canine Creations has just closed the books on their first year of business.

Annie sits down to look over her sales information and assess the company’s performance so far. Here is the information she has:

Gross Sales

$96, 300

Discounts*

$1,515

Returns**

$1,200

Unit Sales

44,378

*Annie’s Canine Creations offers a discount to owners of multiple dogs.

** Annie’s Canine Creations has a no questions asked returns policy.

                  Part 1. Calculate Annie’s net sales

Part 2. Annie bakes for four hours every morning, turning out 14 dozen cookies, muffins, and nuggets. Over the past year she has sold 44,378 units. What is the average price of Annie’s products?

Part 3. A local competitor, Doug’s Doggie Delights had gross sales of $205,000 this year. Doug has 2 full-time employees, plus himself, working in the store. They sold 63,000 units this year. What is the average price for a Doug’s Doggie Delights product?
Part 4. How did Annie perform compared to Doug? Would you recommend she make any changes to her business model?

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Homework Answers

Answer #1

1. Net sales = Gross sales - Discounts - Returns

= 96300 - 1515- 1200

= 93585

2. Average price = 96300/ 44378 = 2.17

3. Average price of Doug's Doggie Delights = 205,000/ 63,000 = 3.25

4. Anne has sold lesser units than Doug in spite of the selling price being lower and also offering discount and a no questions asked returns policy. She can increase her selling price to match that of Doug, add more varieties to the menu and also can employ one additional resource to help her out.

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