Question

Imagine you have a set budget of $300,000.00 to start your business.

How will you choose to allocate your money between various business expenses? Justify your answer.

You may choose from the following list or use your own

•Labor; be specific to the components of your labor force.

•Marketing

•Advertising

•Materials/Supplies

•Equipment

•Office/Clinic/Space

•Phone/Internet Access

•Licenses

•Inventory

•Insurance

2) Business expense Amount Total Amount:

Imagine you have X number of hours each week to work on your business.

How will you choose to allocate your time? Remember, you can do things

yourself or hire people to help you.

Below are some examples or you may choose your own:

•Market Research

•Create a Website

•Distribution

•Print Materials

•Resume Research/Hire Employees

•Apply for licenses

•Networking

•Marketing/Advertising

•Learn Professional Skills

Business expense	Amount

TOTAL AMOUNT:

Given the constraints of this activity, what were the main factors that influenced the business expense allocations and weekly activities you chose?

3.Explain your decision using the concepts of scarcity and tradeoffs

4. What activities would you like to have been able to include if you had more

time or money?

5. Now that you’ve completed the business plan, identify from the tables above;

a.The Direct Costs

b.The Indirect Costs

c.The Fixed Costs

d.The Variable Costs

e.Sunk Costs.

justify the classification of each cost category

Answer 1

•Labor; be specific to the components of your labor force.:The Variable Costs

•Marketing: The Indirect Costs

•Advertising: Sunk Costs.

•Materials/Supplies: The Variable Costs

•Equipment: The Fixed Costs

•Office/Clinic/Space: The Fixed Costs

•Phone/Internet Access: The Fixed Costs

•Licenses: Sunk Costs.

•Inventory: The Variable Costs

•Insurance: The Fixed Costs