Cabinet Accessory Company: Sales, Cost, and Gross Profit Analysis

In this assignment, you will learn how to use Excel to calculate contribution margin from a set of sales data and how to use sales and cost data to create segmented income statements. With this information, you will also be asked to analyze the data by region, brand and product line.

Complete the tutorial using the practice dataset before attempting to complete the assignment. The completed Excel file is to be uploaded in Connect/Blackboard for 10 points, and you should answer a series of analytical questions in Connect/Blackboard for 15 points.

Learning Objectives:

1. Find and correct errors in a data set (clean the data)
2. Add columns containing formulas to a data set
3. Create a pivot table in Excel
4. Create a pivot chart in Excel
5. Analyze sales data using a pivot table and a pivot chart
6. Create a calculated field in a pivot table
7. Sort a pivot table by stated criteria
8. Filter a pivot table
9. Interpret findings from a pivot table using segment margins and operating income

Dataset Background:

This dataset represents sales and cost data for a fictitious company, Cabinet Accessory Company (CAC), covering the four-year period from 2014 to 2018. CAC sells cabinet hardware including knobs and pulls.

Requirements:

1. Create three columns in the Data worksheet that calculate sales revenue, variable cost, and contribution margin for each sales record (each row.) Use the columns already named in the Data worksheet sales revenue, variable cost, and contribution margin, respectively. Format numbers in the three columns as Accounting with two decimal places.

2. Create a pivot table that shows sales revenue by region for each of the four years and quarters. Correct any errors in the original dataset in the worksheet that are revealed in this initial pivot table. Once you have corrected the errors in the original data set, refresh the pivot table to reflect the corrected data. Insert a pivot chart that shows the sales revenue trend by region over the four-year period. In the pivot chart, the x-axis should be years and the y-axis should be sales revenue. What trends do you see in the pivot table and pivot chart?

3. Create a pivot table that shows sales revenue, variable cost, and contribution margin for each year for each region.
4. Create a pivot table to answer the question What was the most profitable brand in each year, as measured by contribution margin?

5. Create a pivot table to answer the questions: Within each brand, what was the most profitable collection in 2018, as measured by the contribution margin ratio? The least most profitable collection for each brand? Use the field years to filter the data to include just the year of 2018. You will need to add a calculated field to the pivot table to calculate the contribution margin ratio. Within each brand, sort the collections by contribution margin ratio, from the largest to the smallest. Interpret your findings. Are any collections unprofitable? Which one(s)?

6. Complete the worksheet named segment margin. You will calculate each regions segment margin and operating income for 2018. (Hint: Link to the totals in the pivot table you created for Requirement 3.) You will get the fixed costs for calculating the segment margins from the fixed cost data worksheet. Do you think any regions should be dropped or otherwise restructured? Explain.