3. Discuss the importance of Excel Q5 calculations to Wicked Mikes Manufacturing (BE, TP, CM% and MOS). Give examples supported by new numbers (new spreadsheet) of how you would use these calculations as the CFO of the company. Fully discuss the differences between the traditional vs CVP format (minimum of 3).

Excel Q5 referred to above, completed in screenshot below:

5. Prepare three CVP Income Statements using the following yearly volumes: 500, 2000 and 2500. Keep in mind how variable and fixed costs behave. The traditional income statement from #4 should be about the same net income as the 2000 units for the CVP format. In addition, Q1, should agree to the total fixed costs and per unit variable costs for these schedules. (see PowerPoint from chat the week of the project for format) a) Calculate Break-even in units and sales $ for the company b) Contribution margin ratio c) Calculate units and sales $ if the company wants a profit of $1,000,000. d) Margin of safety in dollars for 2000 units.

Average costs are shown below 500 $6,088,912 50 2000 $24,355,650.00 2500 $30,444,56250 $400,000.00 $100,000.00 $85,000.00 $16,000.00 $80,000.00 $631,000.00 $340.50 Manufacturing Overhead Salaries for factory supervisor, janitor and security Factory Rent Depreciation for factory equipment Factory Property Taxes Maintenance for factory equipment Total Fixed Manufacturing Overhead Per Unit Fibed selling and administrative expense Salaries-otice and administrative ofice Rent Insurance office Depreciation office equipment Advertising Total Fixed Selling and Administration Expense Per Unit Income Statement Sales in Units Sales in Revenue Less: Variable Cost Direct Materials Direct Labor Variable selling and administrative Total Variable Cost Contribution Margin Less Fixed Cost Fixed Manufacturing overhead Variable selling and administrative Total Fixed cost Net Income foss) $3,250,000.00 $270,000.00 $129,750.00 $3,649,750.00 $2.439,162 50 $13,000,000.00 $1,080,000.00 $519,000.00 $14.599,000.00 $9,756,650.00 $16,250,000.00 $1,350,000.00 $648,750.00 $18,248,750.00 $12,195,812 50 $650,000.00 $350,000.00 $60,000.00 $40,000.00 $220,000.00 $1,320,000.00 $660.00 $681,000.00 $1,320,000.00 $2,001,000.00 $438,162.50 $681,000.00 $1,320,000.00 $2,001,000.00 $7,755,650.00 $681,000.00 $1,320,000.00 $2.001,000.00 $10,194,812.50 Variable Selling and Administrative Otice utilities and Misc office expenses Sales Travel Sales Commission Total Variable Selling and Administrative Expense Per Unit $45,000.00 $24,000.00 $450,000.00 $519,000.00 $259.50 Computation of Cost Per Unit Direct Material Cost Direct Labor Cost Fixed Manufacturing Overhead Total Cost Per Unit Markup at 65% Selling Price Per Unit $6,500.00 $540.00 $340 50 $7,380 50 $4,797 33 $12,177-83 A. Break Even Sales Selling Price Per Unit Less: Variable Cost Per Unit Contribution Margin Per Unit $12,177.83 $7,300.00 $4,877.83 Total Fixed Cost BEP 1 Sales BEP Dollar Sales $2,001,000.00 313 46.70% $4,284,796.57 B. Contribution Margion Per Unit Selling Price Per Unit $4.877.83 $12,177-83 40.05% 615 2332238 615 Units Units to be sold to earn a profit of $1,000,000 Fixed Cost+Desired Profit / Contr. Margin Per Unit sales required to earn a profit of $1,000,000 Fixed Cost+Desired Profit/Contr Margin Ratio $7,492,202 53 D. Margin of Safety Dollar = Sales at 2,000 level - BEP Sales Sales at 2,000 Units BEP sale Margin of Safety dollar $24,355,650.00 $4,284,796 57 $20,070,853.43