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Transcription of this question: Pelican Pies (PP)Pelican Pies (PP) produces high-quality pies that have limited brand loyalty outside of their localmarket. The prices of the pies are higher than those of PPS competitors.Table 1: Selected financial information for PP for the year ending 30 April 2017.Number of pies soldPrice of each pie soldCost of goods sold per pieExpensesElectricity per month• Rent of premises per quarterPromotional expenses per year8% interest per year paid on a loan ofTax8000$4.00$1.75$200$1000$1000$40 00025 % of profitsFor 2018, PPS owner, Austin, is looking to increase sales beyond the local market by loweringprices and spending a greater proportion of PPS promotional budget on above-the-line methodssuch as regional newspaper advertisements. To finance this type of promotion, Austin will have toincrease his loan amount by $10000.Table 2: Selected financial information for the year ending 30 April 2018.Number of pies soldPrice of each pie soldCost of goods sold per pieExpensesElectricity per month• Rent of premises per quarterPromotional expenses per year8% interest per year paid on a loan of20 % increase on 2017 figure30% decrease on 2017 figure$1.75$200$1000200 % increase on 2017 figure$5000025% of profitsTax(a)(b)(c)Describe one reason why brand loyalty would be important to PP.Construct a profit and loss account for PP for the year ending 30 April 2017 based onthe figures in Table 1 (show all your working).Construct a forecasted profit and loss account for PP for the year ending 30 April2018 based on the figures in Table 2 (show all your working).[2]

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