Connelly Incorporated, a manufacturer of quality electric ice cream makers, has experienced a steady growth in sales over the past few years. Because her business has grown, Jan De Janey, the president, believes she needs an aggressive advertising campaign next year to maintain the company's growth. To prepare for the growth, the accountant prepared the following data for the current year: $ 13.00 15.50 6.50 $ 35.00 Variable costs per ice cream maker Direct labor Direct materials Variable overhead Total variable costs Fixed costs Manufacturing Selling Administrative Total fixed costs Selling price per unit Expected sales (units) $ 94,000 70,000 378,000 $ 542,000 $ 65 45,500 Required: 1. If the costs and sales price remain the same, what is the projected operating profit for the coming year? 2. What is the breakeven point in units for the coming year? 3. Jan has set the sales target for 49,500 ice cream makers, which she thinks she can achieve by an additional fixed selling expense of $176,150 for advertising. All other costs remain as per the data in the above table. What will be the operating profit if the additional $176,150 is spent on advertising and sales rise to 49,500 units? 4-a. What will be the new breakeven point if the additional $176,150 is spent on advertising? 4-b. Prepare a contribution income statement at the new breakeven point. 4-c. What is the percentage change in both fixed costs and in the breakeven point? 5. If the additional $176,150 is spent for advertising in the next year, what is the sales level (in units) needed to equal the current year's operating profit at 45,500 units? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req 4A Req 4B Req 4C Reg 5 If the costs and sales price remain the same, what is the projected operating profit for the coming year? Projected operating profit Req 1 Reg 2 Reg 3 Reg 4A Reg 4B Req 4C Reg 5 What is the breakeven point in units for the coming year? (Round your answer up to the nearest whole number.) Breakeven point units Req 1 Req 2 Req3 Req 4A Req 4B Req 4C Req 5 Jan has set the sales target for 49,500 ice cream makers, which she thinks she can achieve by an additional fixed selling expense of $176,150 for advertising. All other costs remain as per the data in the above table. What will be the operating profit if the additional $176,150 is spent on advertising and sales rise to 49,500 units? Operating profit Req 1 Req 2 Req3 Reg 4A Req 4B Req 4C Req 5 What will be the new breakeven point if the additional $176,150 is spent on advertising? (Round your answer up to the nearest whole number.) New breakeven point units Req 1 Req 2 Req3 Req 4A Req 4B Req 40 Req 5 Prepare a contribution income statement at the new breakeven point. CONNELLY, INC. Contribution Income Statement $ $ 0 Original amount Incremental amount $ 0 0 $ Req 1 Reg 2 Req3 Req 4A Req 4B Req 4C Req 5 What is the percentage change in both fixed costs and in the breakeven point? (Input your answers as p to 2 decimal places (i.e., .1567 = 15.67%.).) Percentage change in fixed cost Percentage change in breakeven point % % Req 1 Reg 2 Req 3 Req 4A Req 4B Req 4C Req 5 If the additional $176,150 is spent for advertising in the next year, what is the sales level (in units) needed to equal the current year's operating profit at 45,500 units? (Round your answer up to the nearest whole number.) Sales level units
