2 ACCT - 2201 Managerial Accounting Chapter 3 Project Segment 3 5 atulations! Your pitch to LPC was so thorough and convincing that Cal and 8.1 decided to hire you as their managerial accounting consultant Your ask is to provide with a contribution format income statement along with some other valuable calculations. LPC almady had traditional financial 7 nents created for the bank using GAAP at the end of the year. They show a profit, but not as much of a profit as they expected. The saditional format 8 does not give the details needed to make decisions. Cal and B. want to really analyze their financials to determine what their sales targets should be 9ow different ideas to boost sales will effect their bottom line 10 11 ber of batches sold 12 produced with each batch 18,600 40 15 le labor per batch 13 price per batch 14 e materials per batch 15 ble Overhead peruch $ 93.00 35.70 27.75 10.75 17 e selling expenses perbatch 3.00 18 le administrative expenses per batch $ 2.50 19 salates $ 40,000 20 ve Salaries 110.000 24 25 21Staff Salary 22 Occupancy 23 Factory Overhead Leaf Peepers Ice Cream, Inc. 26 Traditional Income Statement Projected 27 For the Year Ended December 31, 2021 28 30 Revenues 31 of Goods Sold 32 Poft Expenses 35istrative Expenses 36 Selling & Administrative Expenses 37perating income 38 39 40 41 42 43 44 45 46 47 40,000 10,000 $ 30,000 Leaf Peepers Ice Cream, Inc. Contribution Income Statement Projected For the Year Ended December 31, 2021 1,729,300 Sales Revenues $ 1,729,800 Variable Costs 1,410,120 Materials 664020 319,680 Labor 516150 Overhead 199950 95,800 Selling 55800 206,500 Administrative 46500 302,300 Total Vatable Cost 1483420 Contribution Margin 247380 Fixed Co Pro Tip: When formatting your income statement remember that it is just 1 schedule, despite any gaps that are formed for aesthetic purposes. Selling Administrative Overhead Total Fixed Cost Net Operating Income 48 to your class notes to find the formula for the contribution margin ratio, then use formulas and linking to calculate the ratio for LPIC 0.14 49 50 150000 50000 10000 230000 OUL 24 51 to your class notes to find the formulas for break even in sales revenues and batches (units), then use formulas and linking to calculate those figures $2 C Why is it helpful for LPIC to know their break even? 53 Revenues 0.93 Batches 17293.23 79.70 55 57 heful for the LPC to know their break-even because that way they have the knowledge of at what point will the product start to be profitable for the company. This is also important because no company wants to operate in a net loss instead they want the highest net profit possible. 58 60 61 to your class notes to find the formula for margin of safety, then use formulas and linking to calculate the figure in both sales revenues and units for 62t the cument sales volume. What is the significance of your results? 63evenues 64 7.03 65 Batches 67ding on the Margin of Safety that indicates the company where there are in good shape or if its low they should lower their expenses to produce more 68e and increase the margin of safety. 70 71 overview tab it was explained that Cal & BI need to be able to triple their salaries to avoid personal financial ruin. Net income would need to 72 se significantly before the company can handle tripling the salaries. Complete the schedule below using formulas and linking to figure out what 73 net income needs to increase to in order to cover the increased salaries. 74 7581's desired total salary 7681's cument executive salary 77 income required to cover new salary 78 79 110000.00 52140.00 80 et income required to cover their new salary calculated directly above) represents the target profit needed before the new salary can be permitted 81 to your class notes to find the formula for revenues required to reach target profit Refer to your notes for the formula for sales revenues required to 2 taget profit and use formulas and linking to calculate it. Does this seem achievable, or do you think LPC needs to do something other than increase 83 volume to permit the salary increase? Explain your answer 86 evenues Batches 89 90 91 PROJECT SEGMENT CHECKLIST THEN DELETE THIS 92