2018 Actual 1,060,500 Sales COGS 2018 Budget 1,101,600 $ Tires 918 700 Material Labor Disposal Rent Utilities Supervision Depreciation Maintenance isks as is as an is in 475,250 224,680 35,000 42,000 22,000 50,000 50,000 12 000 910.930 149,570 511,020 233,325 35,190 42,000 24,000 50,000 50,000 7,000 952.535 149,065 BUDGET # of activities Sales Price Labor hours Labor cost per hour Material cost Disposal cost Oil 6,120 25 0.35 25 S 6 $ 2 S Brakes 1.530 200 2.00 25 $ 70 $ S 450 25 400 25 Total COGS Gross Profit $ $ $ ACTUAL Oil Brakes Tires of activities 7,000 1,400 Average Sales Price 24 210 74812 Average Material Cost 725 6 5 416.88 Average Labor Hours 0.3221154.3 Average Labor Cost per hr 26 26 Average Disposal Cost 25 0 2188 * Any rounding should be put in Tires SG&A Expenses Insurance Computer/Phone Office Supplies Advertising Total SG&A Expenses 12,000 3.250 2.800 10,000 3,000 3.000 5.000 21,000 6,000 24,050 Operating Income 125,520 128,065 Variable Expenses - Material, Labor and Disposal Fixed Expenses - Rent, Utilities, Supervision, Depreciation, Maintenance, Insurance, Computer/Phone, Office Supplies, Advertising Three Products - Oil Change, Brakes, Tires Styles Please answer: Question la - Prepare Contribution Margin Statements from the actual and budgeted 2018 Income Statements given and place in proper column of the Flexible Budget Performance report. Questionlb - Prepare a Flexible Budget for Mike's Auto Center for 2018 and place in proper column of the Flexible Budget Performance report. Question le-Review the report and identify which variances should be investigated further and why. Question 2a - Prepare a segmented income statement for Mike's Auto Center using the 2018 Actual results. Of the fixed expenses, the following can be traced to specific segments: Oil Brakes Tires Rent 20% 30% 30% Utilities 35% Depreciation 10% 25% Maintenance 10% 30% Amounts not assigned to segments are common expenses of the business. Question 2b - Comment on the profitability of the Mike's Auto Center segments and identify any areas that require further investigation. Question 3 - Prepare a budget for 2019 by segment using the information learned from Requirements 1 and 2 and additional information below. List out all of your strategies for growth and expansion given the following info. Budget to include the following: 1. Sales budget 2. Materials Budget 3. Labor Budget 4. Disposal Budget 5. SG&A Budget 6. Segmented Cont Additional Info: -General sales growth is expected to be 10% -Expenses are expected to remain at 2018 levels - Base 2019 pricing and costs off of the 2018 actual results -You cannot apply both the increased rent or increased advertising to the same segment -Mike's has an opportunity to lease additional space that could be used to increase the activity in one of the three segments additional rent would be $10,000 per year and activity increases in the chosen area would be 2,000 oil changes, 250 Brake jobs or 72 tire jobs -Mike is willing to increase the 2018 advertising spend in 2019 by $2,000 with the additional amount focused on one of the three segements - this is expected to increase sales dollars 10% in the affected segment -Currently there is one supervisor managing 4 hourly employees each working 2,080 hours per year or 8,320 total annual hours. If sales and expansion increases the total labor hours to the point of adding more than one more employees (additional 2,080 hours), then another supervisor will be needed at the same salary as the current one Alignment xif CND G H M AB ke's Auto Center exible Budget Report a) and b) Actual Results Spending Variance F/ Flexible U Budget Activity F/ Original Variance 011 U Budget Sales su Variable Expenses Material Labor Disposal Total Variable Contribution Margin Fixed Expenses Rent Insurance Utilities Supervision Computer/phone Office Supplies Advertising Maintenance Depreciation Total Fixed Expenses Operating Income i . Information (3) Information (2) Information Requirement 1 Requirement 2 Requirement eady Tine here to search