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Understanding the Costs of Slushie Production: Consumables and Overhead Breakdown

This guide outlines the various costs involved in producing slushies, categorized into consumables and overhead expenses. Consumables include items used in the production process, such as cups, straws, ice, and flavoring. We provide a detailed breakdown of the costs for each item, like $23 for 1,000 cups and $4.50 for a block of ice. Overhead expenses consist of necessary costs to keep the business operational, like electricity, employee wages, and rent. Our analysis simplifies the financial considerations for your slushie business.

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Understanding the Costs of Slushie Production: Consumables and Overhead Breakdown

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Presentation Transcript

  1. What goes into a Slushie? With your group, brainstorm all the costs associated with producing a slushie….

  2. Two categories of expenses • Consumables- items that are “used up” when producing the product • Overhead- expenses to keep the business running, not part of the product

  3. Consumables • Cups • Straws • Ice • Flavoring

  4. Overhead • Electricity • Employee wages • Rent/Mortgage • Advertising • Insurance • Furniture

  5. Consumables- The Breakdown • Cups: $23/1,000 cups • Straws: $150/10,000 straws • Ice: $4.50/block (one block makes 10 small) • Flavoring Process • Concentrate is purchased by the gallon ($32) • The concentrate is mixed with a sugar water solution producing 2,730 oz of flavoring • Each small has 3 oz of flavoring

  6. Overhead • Note: Assume a 30 day month, approximately 150 small slushes are purchased per day • Electricity: $125 month • Employee wages: $8/hour, 7 hour per day • Rent/Mortgage* • Advertising* • Insurance* • Furniture* • *for this activity, we willnot include these expenses

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