MGS 3040-03Chapter 3
Application Exercise #1 pg. 87Claudette, Aleksey, Jadwiga, Barbara, Susan, &
Justin
Resort Bicycle Rental
Bicycle Inventory ValuationThursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 85 $6,375
Wonder Bike II $385 4 34 $4,570
Wonder Bike Supreme $475 8 44 $5,200
Litelift Pro $655 8 25 $2,480
Litelift Ladies $655 4 40 $6,710
Litelift Racer $795 3 37 $5,900
The Given Information:
Cost of Current Inventory=Bike cost * Number of Bikes on Hand
Resort Bicycle RentalBicycle Inventory Valuation
Thursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 $3,900 85 $6,375 Wonder Bike II $385 4 $1,540 34 $4,570 Wonder Bike Supreme $475 8 $3,800 44 $5,200 Litelift Pro $655 8 $5,240 25 $2,480 Litelift Ladies $655 4 $2,620 40 $6,710 Litelift Racer $795 3 $2,385 37 $5,900
Bike Cost Number on Hand Cost of Current Inventory325 12 =B7*C7385 4 =B8*C8475 8 =B9*C9655 8 =B10*C10655 4 =B11*C11795 3 =B12*C12
Revenue Per Bike= Total Rental Revenue/ Number of Bikes on Hand
Resort Bicycle RentalBicycle Inventory Valuation
Thursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 $3,900 85 $6,375 $531 Wonder Bike II $385 4 $1,540 34 $4,570 $1,143 Wonder Bike Supreme $475 8 $3,800 44 $5,200 $650 Litelift Pro $655 8 $5,240 25 $2,480 $310 Litelift Ladies $655 4 $2,620 40 $6,710 $1,678 Litelift Racer $795 3 $2,385 37 $5,900 $1,967
Total Rental Revenue Revenue Per Bike6375 =F7/C74570 =F8/C85200 =F9/C92480 =F10/C106710 =F11/C115900 =F12/C12
Number on Hand1248843
Revenue as a Percent of Cost of Inventory=Total Rental Revenue/ Cost of Current Inventory
Resort Bicycle RentalBicycle Inventory Valuation
Thursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 $3,900 85 $6,375 $531 163.5%Wonder Bike II $385 4 $1,540 34 $4,570 $1,143 296.8%Wonder Bike Supreme $475 8 $3,800 44 $5,200 $650 136.8%Litelift Pro $655 8 $5,240 25 $2,480 $310 47.3%Litelift Ladies $655 4 $2,620 40 $6,710 $1,678 256.1%Litelift Racer $795 3 $2,385 37 $5,900 $1,967 247.4%
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
3 Management decisions that can be made from this dataContinue 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.
Resort Bicycle Rental
Bicycle Inventory ValuationThursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory Cost Per Rental
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 $3,900 $75 85 $6,375 $531 163.5%
Wonder Bike II $385 4 $1,540 $134 34 $4,570 $1,143 296.8%
Wonder Bike Supreme $475 8 $3,800 $118 44 $5,200 $650 136.8%
Litelift Pro $655 8 $5,240 $99 25 $2,480 $310 47.3%
Litelift Ladies $655 4 $2,620 $168 40 $6,710 $1,678 256.1%
Litelift Racer $795 3 $2,385 $159 37 $5,900 $1,967 247.4%
Resort Bicycle RentalBicycle Inventory Valuation
Thursday ,September 24, 2009
Make of Bike Bike CostNumber on Hand
Cost of Current Inventory Cost Per Rental
Number of Renatals
Total Rental Revenue
Revenue Per Bike
Revenue as percent of Cost of Inventory
Wonder Bike $325 12 $3,900 $75 85 $6,375 $531 163.5%
Wonder Bike II $385 4 $1,540 $130 34 $4,420 $1,105 287.0%
Wonder Bike Supreme $475 8 $3,800 $120 44 $5,280 $660 138.9%
Litelift Pro $655 8 $5,240 $90 25 $2,250 $281 42.9%
Litelift Ladies $655 4 $2,620 $170 40 $6,800 $1,700 259.5%
Litelift Racer $795 3 $2,385 $155 37 $5,735 $1,912 240.5%