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CVP Analysis using Excel's Basic Math Functions 1 JPL Inc. has provided its sales and expense data for the most recent period. The Controller has asked you prepare a spreadsheet that shows the related CVP Analysis computations. Use the information included in the Excel Simulation and the Excel functions described below to complete the tack O 5 Excel HW 1 B D - C 1 Given the following information complete a CV analysis 2 for JPL Inc.: 3 4 Unit sales 11,200 units 5 Selling price per unit $75 per unit 6 Variable expenses per unit $45 per unit 7 Fixed expenses $210,000 8 9 Use the data to answer the following, 10 11 1. Compute the CM ratio and variable expense ratio 12 Selling price per unit per unit 13 Variable expenses per unit per unit 14 Contribution margin per unit per unit 15 16 CM ratio 17 Variable expense ratio 18 19 2. Compute the break-even point 20 Break-even in unit sales units 21 Break-even in dollar sales 27 C B D E units 16 CM ratio 17 Variable expense ratio 18 19 2. Compute the break-even point 20 Break-even in unit sales 21 Break-even in dollar sales 22 23 3. Compute the margin of safety 24 Margin of safety in dollars 25 Margin of safety percentage 26 27 4. Compute the degree of operating leverage 28 Sales 29 Variable expenses 30 Contribution margin 31 Fixed expenses 32 Net operating income 33 34 Degree of operating leverage 35 36 37 2 High-Low Method and Contribution Format Income Statement using Excel's SUM and Basic Math Functions Jay Corporation has provided data from a two-year period to aid in planning. The Controller has asked you to prepare a contribution format income statement Use the information included in the Excel Simulation and the Excel functions described below to complete the task B4 B D E 1. To aid in planning Jay Corporation is preparing a contribution format income statement. 2 4 3 Budgeted information for Quarter 1 of Year 3: Sales in units 5 Sales price per unit 17,000 48.00 $ 6 $ 9 7. After analyzing expenses, the company has determined the following cost patterns. 8 Cost of goods sold 29.00 per unit Sales commissions 9.50% per dollar of sales 10 11 Administrative salaries S 45,000.00 per quarter 12 Rent expense s 27,000.00 per quarter 13 Depreciation expense $ 36,000.00 per quarter 14 15 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 16 17 Year 1 Total Shipping Cost Units 18 Quarter 1 $ 67,000.00 12,500 19 Quarter2 S 94,000.00 21,000 20 Quarter 3 $ 89,800.00 13,800 21 Quarter 4 $ 92,600.00 20,000 er 6 Excel Hw D E B 231 OK 17 Quarter 4 $ 92,600.00 20,000 22 Year 2 23 Quarter 1 $ 72,500.00 13,700 24 Quarter2 $ 80,000.00 14,000 25 Quarter 3 $ 84,000.00 14,300 26 Quarter 4 $ 100,000.00 22,500 27 28 Use the data to answer the following, 29 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable cost per unit 38 39 Compute the fixed cost portion using the high level of activity. 40 Total cost at high level of activity 41 Less: Variable cost element 42 Total fixed cost 32 nos D c E B 42 Total fixed cost 43 44 2. Prepare a contribution format income statement for Quarter 1 of Year 3. 45 46 Jay Corporation 47 Budgeted Contribution Format Income Statement 48 For Year 3, Quarter 1 49 50 Sales 51 Variable expenses: 52 Cost of goods sold 53 Sales commissions 54 Shipping expense 55 Total variable expenses 56 Contribution margin 57 Fixed expenses: 58 Administrative salaries 59 Rent expense 60 Shipping expense 61 Depreciation expense 62 Total fixed expenses 63 Net operating income
