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MGS 3040-03 Chapter 3 Application Exercise #1 pg. 87 Claudette, Aleksey, Jadwiga, Barbara, Susan, & Justin.

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Presentation on theme: "MGS 3040-03 Chapter 3 Application Exercise #1 pg. 87 Claudette, Aleksey, Jadwiga, Barbara, Susan, & Justin."— Presentation transcript:

1 MGS Chapter 3 Application Exercise #1 pg. 87 Claudette, Aleksey, Jadwiga, Barbara, Susan, & Justin

2 Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current Inventory Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$ $6,375 Wonder Bike II$ $4,570 Wonder Bike Supreme$ $5,200 Litelift Pro$ $2,480 Litelift Ladies$ $6,710 Litelift Racer$ $5,900 The Given Information:

3 Cost of Current Inventory =Bike cost * Number of Bikes on Hand Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current Inventory Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$32512$3,90085$6,375 Wonder Bike II$3854$1,54034$4,570 Wonder Bike Supreme$4758$3,80044$5,200 Litelift Pro$6558$5,24025$2,480 Litelift Ladies$6554$2,62040$6,710 Litelift Racer$7953$2,38537$5,900 Bike CostNumber on HandCost of Current Inventory 32512=B7*C7 3854=B8*C8 4758=B9*C9 6558=B10*C =B11*C =B12*C12

4 Revenue Per Bike = Total Rental Revenue/ Number of Bikes on Hand Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current Inventory Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$32512$3,90085$6,375$531 Wonder Bike II$3854$1,54034$4,570$1,143 Wonder Bike Supreme$4758$3,80044$5,200$650 Litelift Pro$6558$5,24025$2,480$310 Litelift Ladies$6554$2,62040$6,710$1,678 Litelift Racer$7953$2,38537$5,900$1,967 Total Rental RevenueRevenue Per Bike 6375=F7/C7 4570=F8/C8 5200=F9/C9 2480=F10/C =F11/C =F12/C12 Number on Hand

5 Revenue as a Percent of Cost of Inventory =Total Rental Revenue/ Cost of Current Inventory Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current Inventory Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$32512$3,90085$6,375$ % Wonder Bike II$3854$1,54034$4,570$1, % Wonder Bike Supreme$4758$3,80044$5,200$ % Litelift Pro$6558$5,24025$2,480$ % Litelift Ladies$6554$2,62040$6,710$1, % Litelift Racer$7953$2,38537$5,900$1, % Revenue as percent of Cost of Inventory 163.5% 296.8% 136.8% 47.3% 256.1% 247.4% Total Rental Revenue $6,375 $4,570 $5,200 $2,480 $6,710 $5,900 Cost of Current Inventory $3,900 $1,540 $3,800 $5,240 $2,620 $2,385

6 3 Management decisions that can be made from this data Continue purchasing Lite Lift Ladies -> Profit Discontinue purchasing Lite lift Pro -> No profit Sell bikes that are not turning into profit and reinvest the money into the business.

7 Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current InventoryCost Per Rental Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$32512$3,900$7585$6,375$ % Wonder Bike II$3854$1,540$13434$4,570$1, % Wonder Bike Supreme$4758$3,800$11844$5,200$ % Litelift Pro$6558$5,240$9925$2,480$ % Litelift Ladies$6554$2,620$16840$6,710$1, % Litelift Racer$7953$2,385$15937$5,900$1, % Resort Bicycle Rental Bicycle Inventory Valuation Thursday,September 24, 2009 Make of BikeBike Cost Number on Hand Cost of Current InventoryCost Per Rental Number of Renatals Total Rental Revenue Revenue Per Bike Revenue as percent of Cost of Inventory Wonder Bike$32512$3,900$7585$6,375$ % Wonder Bike II$3854$1,540$13034$4,420$1, % Wonder Bike Supreme$4758$3,800$12044$5,280$ % Litelift Pro$6558$5,240$9025$2,250$ % Litelift Ladies$6554$2,620$17040$6,800$1, % Litelift Racer$7953$2,385$15537$5,735$1, %


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