A 1 Chapter 1: Applying Excel B 2 3 Data 4 Sales $12,000 5 Variable costs: 6 Cost of goods sold $6,000 7 8 9 Variable selling Variable administrative Fixed costs: $600 $400 10 Fixed selling 11 Fixed administrative 12 $2,500 $1,500 D 13 Enter a formula into each of the cells marked with a ? below 14 Exhibit 1-7 15 16 Traditional Format Income Statement 17 Sales 18 Cost of goods sold 19 Gross margin 20 Selling and administrative expenses: 21 Selling 22 Administrative 23 Net operating income 24 $ 12,000 6,000 6,000 $ 3,100 1,900 5,000 $ 1,000 25 Contribution Format Income Statement 26 Sales 27 Variable expenses: 28 Cost of goods sold 29 Variable selling 30 Variable administration $ 12,000 $ 6,000 600 400 7,000 31 Contribution margin 32 Fixed expenses: 5,000 33 Fixed selling 2,500 34 Fixed administrative 1,500 4,000 35 Net operating income $ 1,000 36 37 38 39 40 41 42 431 44 D Chapter 1 Form Chapter 1 Form Part 1 Chapter 1 Form Part 2 Ready E F A B 1 Chapter 1: Applying Excel 2 3 Data C D E F 4 Sales $12,000 5 Variable costs: 6 Cost of goo $6,000 7 Variable sel $600 8 Variable ad $400 9 Fixed costs: Fixed selling $2,500 1 Fixed admir $1,500 12 3 Enter a formula into each of the cells marked with a ? below 4 Exhibit 1-7 5 6 Traditional Format Income Statement 7 Sales 8 Cost of goods sold 9 Gross margin $ 12,000 6,000 6,000 O Selling and administrative expenses: 1 Selling $ 3,400 2 Administrati 1,900 5,300 $ 700 3 Net operating income 4 5 Contribution Format Income Statement 5 Sales Variable expenses: 12,000 $ Cost of goo $ 6,000 Variable sel 900 Variable ad 400 7,300 Contribution margin 4,700 Fixed expenses: Fixed selling 2,500 Fixed admir 1,500 4,000 Net operating income $ 700 A B C D 1 Data 2 Sales $69,000 3 Variable Costs: 4 Cost of goods sold $34,500 5 Variable Selling $3,450 6 Variable administrative $3,250 7 Fixed costs: 8 Fixed selling $2,500 9 Fixed administrative $1,500 10 11 Enter a formula into each of the cells marked with a ? below 12 Exhibit 1-7 13 14 Traditional Format Income Statement 15 Sales 16 Cost of goods sold $ 69,000 34,500 34,500 17 Gross margin 18 Selling and administrative expenses: Selling Administrative 19 20 21 Net operating income 22 23 Contribution Format Income Statement 24 Sales 25 Variable expenses: $ 26 Cost of goo $ 27 Variable sel 28 Variable ad 29 Contribution margin 31 30 Fixed expenses: Fixed selling 32 Fixed admir 33 Net operating income $ 33 34 35 36 37 38 39 E F G Paste A1 1 A B Arial B I UV fx C 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 421 43 44 v 10 > A A D E 101 71 101 G H ab Wrap Text Merge & Center Ge $ Chapter 1 Form Chapter 1 Form Part 1 Chapter 1 Form Part 2 Chapter 1 Form Part 2 #2 + Ready 2340 AP EXHIBIT 1-7 Comparing Traditional and Contribution Format Income Statements for Merchandising Companies (all numbers are given) Traditional Format Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income Contribution Format $12,000 Sales $12,000 6,000 Variable expenses: 6,000 Cost of goods sold Variable selling $6,000 600 $3,100 Variable administrative. 400 7,000 1,900 5,000 Contribution margin $1,000 Fixed expenses: 5,000 Fixed selling 2,500 Fixed administrative 1,500 4,000 Net operating income $1,000 For a manufacturing company, the cost of goods sold would include some variable costs, such as direct materials, direct labor, and variable overhead, and some fixed costs, such as fixed manufacturing overhead. Income statement formats for manufacturing companies will be explored in greater detail in a subsequent chapter Beginning Ending Cost of goods sold merchandise + Purchases- merchandise inventory inventory Beginning Cost of goods merchandise +Purchases - sold inventory = $7,000 + $3,000 $6,000 - Ending merchandise inventory $4,000 Required information The Chapter 1 Form worksheet is to be used to create your own worksheet version of Exhibit 1-7 in the text. 1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: A B 08 1 Chapter 1: Applying Excel 2 34 Data Sales $ 69,000 567 5 Variable costs: Cost of goods sold $ 34,500 7 Variable selling $ 3,450 8 Variable administrative $ 3,250 9 Fixed costs: ces 10 Fixed selling $ 2,500 11 Fixed administrative $ 1,500 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the gross margin now? Required information If your formulas are correct, you should get the correct answers to the following questions. (a) What is the gross margin now? Gross margin (b) What is the net operating income now? Net operating income (c) What is the contribution margin now? Contribution margin 2. Suppose that sales are 14% higher as shown below: 2. Suppose that sales are 14% higher as shown below: A B 1 Chapter 1: Applying Excel 2 3 Data 4 Sales $ 78,660 5 Variable costs: 6 Cost of goods sold $ 39,330 7 Variable selling 3,933 8 Variable administrative $ 3,705 99 Fixed costs: 10 Fixed selling $ 2,500 11 Fixed administrative $ 1,500 Enter this new data into your worksheet. Make sure you enter all of the new data - not just the sales. (a) What is the gross margin now? Gross margin S Enter this new data into your worksheet. Make sure you enter all of the new data - not just the sales. (a) What is the gross margin now? Gross margin (b) What is the net operating income now? Net operating income (c) What is the contribution margin now? Contribution margin (d) When sales increase by 14%, which of the following should also increase by 14% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost Fixed cost Gross margin Contribution margin Net operating income (e) When sales increase by 14%, which of the following should increase by more than 14% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost 7 Fixed cost 7 Gross margin Hel HIVI DID HE DRONE. VIE LILA UIE UVA WITH THE QUE IN VIVUULE OLIELA HOIR IUI LUITELL BI Required information BIG LOUVIE LIILA Variable cost Fixed cost Gross margin Contribution margin Net operating income (e) When sales increase by 14%, which of the following should increase by more than 14% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost Fixed cost Gross margin 2 Contribution margin Net operating income