Can you please provide the answers for the cells and explain the calculations?

Enter numbers in blue cells

Enter formulas in the yellow cells

Enter your narrative analysis in the green cells

Kitty Hawk manufactures and distributes high end drones. The following costs are available for the year end. The company had no beginning inventory. Last year they produced 1,800 units and but only sold 1,600 units. The unit selling price was $4,300 and expenses were:

Variable Cost per Unit

Units Produced

1,800

Direct Materials

900

Units Sold

1,600

Direct Labor

750

Units Remaining

200

Variable Mfg Over Head

350

Unit selling price

4,300

Variable selling and admin

65

Annual Fixed Costs

Mfg overhead fixed

950,000

Fixed Selling and admin Expenses

87,500

1.Compute the cost of manufacturing one unit for both variable and absorption costing

Fixed Overhead

fixed cost per unit

Units produced

Determine the product cost for each method

Variable

Absorption

Direct Materials

Direct Labor

Variable Mfg OverHead

Variable selling and admin

Fixed Cost per unit

Total Cost per unit

2. Complete an income statement for both variable and absorption costing

Variable Costing

Income Stmt

Per unit

Variable

Units sold

Sales

Variable Prod Costs

VCOGS

Less Variable selling expense

MFG Margin

Less Fixed Costs

Fixed Mfg Ohead

Fixed Selling

Total Fixed Costs

Net Income

Absorption Costing

Per unit

Absorption

Units

Sales

COGS

Gross Profit

Less Period Costs

Variable selling

Fixed Selling

Total period costs

Net Income

Proof

Absorption net income

Variable net income

Difference

Absorption

Ending inventory

Per unit

Total Ending Inventory

Variable

Ending inventory

Per unit

Total Ending Inventory

Difference

Financial performance measures

Profit margin inv turnover

profit margin

inv turnover

Return on investment = net income = net income x inv center sales

net income

x

inv center sales

ave assets

sales

ave assets

Residual income = net income - target income

INSTRUCTIONS:

Enter numbers in blue cells

Enter formulas in the yellow cells

Enter your narrative analysis in the green cells

1. Compute the return on Assets for each division below

Investment Center

Sales

Net income

Ave assets

Return on Investment

Coffee/Expresso machine

41,250,000

$4,550,000

$22,500,000

Coffee machine w/ grinder

16,975,000

$1,975,000

10,950,000

Basic Coffee maker

10,400,000

875,000

7,500,000

2. Assume a target income of 12% of average invested assets. Compute the residual income for each division

Coffee/Expresso machine

Coffee machine w/ grinder

Basic Coffee maker

12%

Net income

Less target net income

Residual Income

Profit Margin

Coffee/Expresso machine

Coffee machine w/ grinder

Basic Coffee maker

Net income

Sales

X

X

X

Investment Turnover

Inv ctr sales

Ave assets

=

=

=

ROI

3. If you were the Vice President over the Coffee Machine Division what is your analysis of the three products? Are there products where sales is a concern? If so, what three steps would you take to perform further analysis as to whether or not you should discontinue the product?

Allocating Costs

Acme Labs has four separate labs: chemical, bio, mechanical and electrical. The four labs all share the support functions of

Admin, Utilities and insurance. Acme spreads the cost of these three departments to the labs based on the allocation below.

May

Allocation base

Expenses

Administraive expense

104,950

number of employees

Utilities

72,600

square feet per lab

Insurance

36,000

value of assets in use.

213,550

Department

Employees

Square feet

Asset values

Chem Lab

20

10,000

47,950

Bio Lab

99

55,500

88,250

Mechanical Lab

19

29,800

31,500

Electrical Lab

28

18,500

98,500

Totals

166

113,800

266,200

INSTRUCTIONS:

Enter numbers in blue cells

Enter formulas in the yellow cells

Enter your narrative analysis in the green cells

Administrative Expenses

Allocation Base

% allocation base

Cost

Department

# employees

Chem Lab

Bio Lab

Mechanical Lab

Electrical Lab

Totals

Utilities

Allocation Base

% allocation base

Cost

Department

Sqaure feet occupied

Chem Lab

Bio Lab

Mechanical Lab

Electrical Lab

Totals

Insurance

Allocation Base

% allocation base

Cost

Department

Value of Assets in use

Chem Lab

Bio Lab

Mechanical Lab

Electrical Lab

Totals

Summary

Admin

Utilities

Insurance

Total

Chem Lab

Bio Lab

Mechanical Lab

Electrical Lab

Totals