Try to estimate Revenues and expense for the first year and create an estimated Income Statement and Balance Sheet (you may look at existing, perhaps newer companies, of the same organization form) to do this. If so, name the company).
Determine what the breakeven level of service would be, and discuss how you may want to adjust the companies operating leverage in light of your calculation.
Explain what method you would use to allocate costs, and why (Cost driver, Traditional (Direct, Reciprocal, or Step-down) or Activity Based). Again, discuss the pros and cons of each that led to your decision.
Describe how you will settle on pricing (price setter or price taker, target costing or Full Cost pricing or marginal cost pricing)
A summary of if you think the organization will be successful or not.
Again, for each of these, describe your decision- making process, the pros and cons of different options, and specifically why you settled on the decision you made. This part should be 6 pages (1.5 line spacing). I am looking at your thought process, more than what your answer is, so make sure you explain things well!
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