Assignment 3: Final Project: Annie’s on Broadway

On January 1, Annie Franklin opened the doors of her newly relocated boutique “Annie’s on Broadway” in the downtown Westlake Center shopping district mall in Seattle. “Annie’s on Broadway” is a retail boutique stocking women’s fashions in Moderate to Bridge price range. Prior to this move, Annie rented a small retail space in downtown Redmond, WA. This is her second year of operation, with her first year efforts yielding 4 percent net profit on total sales of $497,000, based on markup of 62.4 percent. These financial statistics were good enough to apply for and receive a loan from the Small Business Association (SBA). With the SBA loan and her personal savings from 15 years of working as a buyer for Nordstrom, Annie was capable of raising the requisite capital to acquire a prime location on the fourth floor, among other non-competing clothing and women’s accessory boutiques in the mall. Annie opened her business with three employees, not including her; she has opted not to take salary for first three years. One of the full-time employees was salaried at $36,000 yearly, and the other two part-time employees were paid $10.00 per hour and were employed 30 hours per week. All salaries are net figures.

For additional details, refer to the final project PDF.

Task

This week, perform the following activities in the sequence mentioned below.

1. Using the template provided categorize various expenses of “Annie’s on Broadway” into:

o Direct and indirect expenses o Controllable and non-controllable expenses

For each expense you list, explain why you have decided to include each in a specific category.

2. Calculate the total COGS dollar figure of “Annie’s on Broadway,” showingstep-by-step calculations starting with applying the correct formula.

Document your responses in the template provided and submit it to the W1: Assignment 3 Dropbox by Monday, August 26, 2013.

Assignment 3 Grading Criteria Maximum

PointsCategorized expenses into direct and indirect expenses. 35

Categorized expenses into controllable and non-controllable expenses.

35

Provided reasons for including identified expenses into specific categories.

25

Showed correct step-by-step calculations starting with applying the correct formula to arrive at the correct COGS dollar figure.

25

Format  AI_FRM121_W4_A1_LastName_FirstInitial.doc. Used standard rules of English spelling, grammar, punctuation,

5

mechanics, syntax, and sentence construction to communicate ideas and opinions explicitly and clearly in writing.Total: 125

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