Giberson's Glass Studio

Giberson’s Glass Studio
Comparison of the Past and Recommendations for the Future

Giberson’s Glass Studio
Income Statement
For the Year Ending August 31, 2007

Revenues: Sales $ 31,080 Total Revenue $31,080
Expenses:
Materials $ 857 Gas 9,200 Operating Expenses 10,210 Depreciation 4,625 Interest 460 Total Expenses 25,352
Net Income 5,728

Executive Summary

This report is to provide an evaluation of the current financial position and prospective profitability of Giberson’s Glass Studio. The calculations used and information are presented in the documents following and outlining each recommendation.

We find the company to be in positive financial standing, but with large areas of weakness that will require further investigation and action by management.

We will present the following recommendations: * Reset Pricing Structure * Use of Part Time Labor * Time Management Plan * Demonstration Shows * Product Line Expansion

Recommendation # 1-Reset Pricing Structure

Assumptions: * No other changes (i.e. batch size, production size, labor, etc.) * Increase in Net Income is preferred.

Price per Item Calculations:
Batch Price-$21.43
Salary per Working Week-$625.00
Total Costs per Week-$646.43
Produced Pounds-39.3 lbs.
Costs per item:
Patterned Glass-$8.22 each
Paperweights-$14.80 each
Wrapped Tumblers-$8.22 each
Vases-$9.87 each
We suggest a 50% mark-up from the total cost of each item.

Giberson’s Glass Studio Projected Income Statement-Recommendation #1
For the Year Ending August 31, 20XX

Revenues: Sales $ 40,520 Total Revenue $ 40,520
Expenses:
Materials $ 857 Gas 9,200 Operating Expenses 10,210 Depreciation 4,625 Interest 460 Total Expenses 25,352
Net Income $ 15,168

Recommendation # 2-Use Part Time