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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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