Case Description Jasper Company produces widgets that it sells for $62 each, and Joe Jasper, the owner, is contemplating several ideas to grow his business. He has brought his monthly operating budget to you and has asked you to analyze it for him. (See BUDGET page in accompanying EXCEL spreadsheet.) Each unit requires 1 hour of machine time and direct labor. Assembly workers are paid $20 per hour. The machinery is serviced on a regular schedule based on the number of hours each machine runs. Case Problems Prepare a report that addresses the following questions. You can answer the questions in the way that you feel works best, but you must include answers to all 12 questions in your submission, and you must submit your Excel spreadsheet for this mini case (available in the course): 1. The factory utilities cost is a mixed cost. The utilities cost and number of machine hours are listed on the accompanying EXCEL spreadsheet on the tab "UTILITIES." Determine a cost equation for utilities using SLOPE and INTERCEPT functions in EXCEL- use it to determine budgeted utility costs for this month based on 10,000 units. (Round slope to nearest cent and intercept to nearest $10. 2. Classify the remaining costs as fixed or variable, and document your rationale. 3. Use the results of #2 and #3 to prepare a budgeted contribution margin income statement for 10,000 units. 4. Compute contribution margin ratio. 5. How many units does company need to sell to break even? What is the break-even in sales dollars. 6. Prepare a break-even graph. - Monthly budget for 10,000 units. $ 30,000 15,000 100,000 20,000 18,000 4,500 Administrative Salaries Advertising Assembly labor Building rent and janitorial costs (80% related to factory) Equipment depreciation Factory supplies - Factory utilities (requirement 1) Insurance (60% related to factory) 1 Machine Maintenance 2 Material 3 Office supplies Office utilities 5 Sales Commissions 5 Sales Salaries 7 Supervisors Telephone and internet ??? 8,000 16,100 335,000 2,400 1,200 18,600 20,000 12,000 1,500 m 602,300 Nmst in mm Nm N BUDGET UTILITIES eady - C Factory utility costs for the prior year January February March April May June July August 2 September 3 October 7 November 5 December Machine hours 4,240 4,310 5,630 5,260 4,910 4,790 5,120 5,380 4,830 5,470 5,180 4,430 Utility cost $ 3,350 3,500 4,200 4,150 3,850 3,700 4,250 4,300 3,750 4,350 4,100 3,650 UI ml m lm nm m m to BUDGET UTILITIES sady