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Maria Cupcakes
After her graduation, Maria decided to start her new Cupcakes Shop in a fast growing Area.
As a source of initial cost financing, she received a loan of 400KEGP at interest rate of 15%, to be paid over 4 years.
Fixed Costs per Month
Staff salaries: 25,000
Rental fees: 65,000
Expected demand and costs per Piece
Variable Costs (Expenses Only) per Unit: 3 EGP
Expected Average number of Sold Units/Day: 200 pieces (Expected Growth rate of 20% y/y).
| Based on her pricing strategy, Maria set a price of 35 EGP/pc. Vanilla Cupcakes- Bill of Materials- Y1 |
| Ingredient | Qty | Unit of Measure |
| Plain | 25 | G |
| Sugar | 100 | G |
| Eggs | 1 | Piece |
| Vanilla Extract | 4 | Teaspoon |
| Baking Powder | 2 | Teaspoon |
| Milk | 50 | G |
| Key Assumptions Year 1 Prices |
| Ingredient | Price | Unit of Measure | Currency |
| Plain | 10 | KG | EGP |
| Sugar | 1 | KG | USD |
| Large Eggs | 2 | Pc | EGP |
| Vanilla Extract | 2 | Teaspoon | EGP |
| Baking Powder | 2 | Teaspoon | EGP |
| Milk | 11 | KG | EGP |
Inflation Rate:25%
Working Days/year: 300 Days
Rental fees increasing by 5 % y/y (5 years contract )
Material prices increasing 10% y/y For Materials purchased in local Currency
Starting year 4, Maria is planning to have a new Recipe.
| Vanilla Cupcakes- Bill of Materials- Y4 |
| Ingredient | Qty | Unit of Measure |
| Plain | 20 | G |
| Sugar | 100 | G |
| large Eggs | 1 | Piece |
| Vanilla Extract | 3 | Teaspoon |
| Baking Powder | 2 | Teaspoon |
| Milk | 50 | G |
In 40 mins, help Maria to assess the following;
CM % in Y1.
Required volume to Achieve 50,000 EGP Net in profit in year1.
Profit & Loss Statement for year 1 & year 5.
Identify Risk & opportunities For Maria Business
Answer & Explanation
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