Assignment 3: Final Project: Annies on Broadway

On January 1, Annie Franklin opened the doors of her newly relocated boutique Annies on
Broadway in the downtown Westlake Center shopping district mall in Seattle. Annies on
Broadway is a retail boutique stocking womens 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 noncompeting clothing and womens 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 Annies on Broadway into:
o
o

Direct and indirect expenses

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 Annies on Broadway, showing

step-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

Categorized expenses into direct and indirect expenses.

Categorized expenses into controllable and non-controllable
expenses.
Provided reasons for including identified expenses into
specific categories.
Showed correct step-by-step calculations starting with
applying the correct formula to arrive at the correct COGS
dollar figure.
Format
AI_FRM121_W4_A1_LastName_FirstInitial.doc.

Maximum
Points
35
35
25

25

Used standard rules of English spelling, grammar,

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

125

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