Question
Assignment: Cost Volume Profit Analysis Part 1 Enter inputs and develop income statement report. Create an input area on your spreadsheet. Enter the following: Current
Assignment: Cost Volume Profit Analysis
Part 1 Enter inputs and develop income statement report.
Create an input area on your spreadsheet. Enter the following:
Current Sales Volume (Units) | 5,000 |
Variable Cost Per unit | $76.00 |
Sales Price Per Unit | $19.00 |
Fixed Costs | $300,000 |
Target Net Income Level | $120,000 |
When grading, these inputs will be changed by the instructor. Your model should automatically change appropriately.
Develop a Spreadsheet model to report the following:
Income Statement at Current Sales Level in a Contribution Margin Format
Income Statement at break-even point in a Contribution Margin Format
Income Statement at desired level of net income in a Contribution Margin Format. The Contribution Margin Income statement should include a per unit column and a percent column
The Income Statement Format should look like this:
|
Per Unit |
% |
At Current Level |
At Breakeven Level | At Target Net Income Level |
Sales |
|
100% |
|
|
|
Variable Costs |
|
|
|
|
|
Contribution Margin |
|
|
|
|
|
Fixed Costs | Leave area blank |
|
|
| |
Net Income (loss) |
|
|
|
The only absolute in the Income Statement is the sales percent is 100%
All other Data in the table is derived from formulas based on the inputs.
When the instructor changes the inputs, the income statement report should automatically change.
Part 2 Add to your spreadsheet formulas for the following statistics. Each statistic should be clearly labeled and the answer should be based on formulas from the inputs or from the income statement. When the instructor changes the inputs, the statistics should automatically change.
Margin of safety assuming the Company is operating at the Target net income level.
Break Even Point in Units
Degree of Operating Leverage Assuming the company is operating at the Target net income level.
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