Bowz 4 Kidz Is a New Business That Ellie Has

question 10

Essay

Bowz 4 Kidz is a new business that Ellie has started out of her home utilizing an online business model. In developing pro forma financials, what general questions do the statements need to answer and how will they be applied to Ellie's business?

---

Definitions:

Average Total Cost

The sum of all production expenses divided by the quantity of products made, indicating the per-unit cost.

Average Fixed Cost

The fixed costs of production (e.g., rent, salaries) divided by the quantity of output produced; these costs decline as production increases.

Average Variable Cost

Total variable costs divided by the quantity of output, showing the variable cost per unit of output.

Marginal Cost

The price to produce an additional unit of a product or service.