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Background: We raised capital for this company by having the 15 members of this company invest $5 into a $75 Mother's Day gift basket. We then raffled off tickets for this Mother's Day gift basket at $2 per ticket. We ended up profiting ~$150 off this raffle.
The next step was to build 80 products which we would then sell at $10 per product. The price to build a product was estimated to be ~$4.11. From the capital we raised we ended up investing $137.50 into material costs to produce 36 products. The real price to build a product was $5.18 . The sale price including commission and tax was [10-(5.18+0.89+1.15) = 2.78]. Equaling a BEP of 49 (137.50/2.78). This was established Friday. We still only have 36 products to sell. (Can't meet our BEP with that). Our first sale date was on Saturday outside a local grocery store from 10-4. It was 3 other company members and I selling. I recognized we couldn't meet our BEP with the current sale price. So I talked to the accountant about the fact that we are unable to meet our BEP. The accountant said "I know this whole thing is fucked". I made the executive decision to raise the price per product to $15. [15-(5.18+0.89+1.15)=7.78]. Equaling a BEP of 18(137.50/7.78). I contacted the other members who I would be selling with on Saturday and suggested my idea to them, which they agreed to.
Saturday: We end up selling 20 products. BEP +2.
Monday: I drop the money box off and inform the teacher on what happened on Saturday. He's upset and believes this decision was made out of greed without company approval. We discuss what happened lightly in class that day but mainly reviewed our previous test.
Tuesday: The teacher is filling in as Administrator at the office and we have a substitute. The teacher left questions for us to discuss. We end up sitting in a circle discussing our feelings on the company. Many people say they agree with what I did but feel excluded from the company. The unofficial decision was to liquidate the company after all products have been sold. Then the teacher comes into the classroom to inform us if we take this option we have failed as a company. No one is quite sure what the original goal of the company is. I believed it was to create a profitable business. Which has happened. However others seem to think it was to sell 75 products. Which was unrealistic from the beginning. The next option is to invest more money into buying more materials to produce more products.
My understanding of this is that what I did was the right choice. But the members of the company are still unhappy with the decision.
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