Cost-Volume-Profit Analysis

Using Excel for Cost-Volume-Profit (CVP) Analysis

The Oceanside Garden Nursery buys flowering plants in four-inch pots for $1.50 each and sells them for $3.00 each. Management budgets monthly fixed costs of $2,600 for sales volumes between 0 and 7,500 plants. Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and FORMULAS where appropriate to receive full credit.

1. Use the contribution margin approach to compute the company's monthly breakeven point in units.

2. Use the contribution margin ratio approach to compute the breakeven point in sales dollars

3. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000.

4. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000.

5. Use the contribution margin approach to compute the margin of safety (in units) using the target operating income of $6,000.

6. Use the high low method and the units and associated total costs from Requirement 3 if targeted operating income was $6,000 and the units and associated total costs if targeted operating income was $7,000 to develop the mixed cost formula for our flowering plants business.

7. Prepare a graph of the company's CVP relationships. Include the sales revenue line, the fixed cost line, and the total cost line by completing the table below. Create a chart title and label the axes.Show the formulas as well please :)

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Cost-Volume-Profit Analysis Using Excel for Cost-Volume-Profit (CVP) Analysis The Oceanside Garden Nursery buys flowering plants in four-inch pots for $1.50 each and sells them for $3.00 each Management budgets monthly fixed costs of $2,600 for sales volumes between 0 and 7,500 plants. Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong. 3 Requirements: 1. Use the contribution margin approach to compute the company's monthly breakeven point in units. 2. Use the contribution margin ratio approach to compute the breakeven point in sales dollars. 3. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000. 4. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000. 5. Use the contribution margin approach to compute the margin of safety (in units) using the target operating income of $6,000. 6. Use the high low method and the units and associated total costs from Requirement 3 if targeted operating income was $6,000 and the units and associated total costs if targeted operating income was 15 $7,000 to develop the mixed cost formula for our flowering plants business. 7. Prepare a graph of the company's CVP relationships. Include the sales revenue line, the fixed cost line, 16 and the total cost line by completing the table below. Create a chart title and label the axes. 17 4 5. Chartashstance Create a table to compute the revenue andable costs, fixed costs, and total costs for each volume to use in creating your prap 2 20 400 200 2.400 000 2.000 1,000 1.400 1.800 1,600 30 31 13 Volume Hevone Variable costs Trund Costs Total Cont 34 DATA (from instructions) Description Amount Sales price per unit Variable cost per unit Contribution margin per unit Total fixed costs Profit at breakeven Target profit Requirement 1 Use the contribution margin approach to compute the company's monthly breakeven in units. Reference the cell(s) in the DATA table above when constructing your breakeven formula below. Do not use target profit in this calculation. Format as a number. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Breakeven in Units Requirement 2 Use the contribution margin ratio approach to compute the breakeven point in sales dollars. Reference the DATA cell(s) in your formula for contribution margin ratio below. Do not use target profit in these calculations. Format the ratio as a percentage and the breakeven in dollars as accounting number format in whole dollars. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the instructions tab you will be marked wrong.) Contribution margin ratio Breakeven in Dollars Requirement 3 Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000 Reference the cell(s) in the DATA table above when constructing your target sales level formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the target operating income. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Target sales level (in units) Requirement 4 Use the contribution margin approach to compute the monthly sales level (in units) required to increase the target operating income of $6,000 by 10% and increase advertising costs by $1,000. Reference the DATA cell(s) in your formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the target operating income. Target sales level (in units) Requirement 5 Use the contribution margin approach to compute the margin of safety (in units) using the target operating income of $6,000. Reference the DATA cell(s) in your formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the margin of safety Margin of Safety (in units) 53 54 Requirement 6 Use the high low method and the units and associated total costs from Requirement 3 if targeted operating income was $6,000 and the units and associated total costs if targeted operating income was $7,000 to develop the mixed cost formula for our flowering plants business. Reference the DATA cell(s) in your formula below. Format appropriately. 55 56 57 58 59 60 61 High Low Method Step 1. Variable cost per unit Step 2 - Fixed Cost 63 Step 3 - Mixed Cost Formula 64 65 66 HINTS 67 Cell Hint: 04:09 | Enter the appropriate numeric values given on the instructions tab. Use an equal sign (+) and the appropriate cells previously completed in the DATA table to calculate the values that are not directly given on the instructions tab. Do not use equal sign 68 (-) 69 C35 Use the function =ROUNDUP(), to calculate the target sales level. 70 C43 Use the function =ROUNDUP(), to calculate the margin of safety. 71 72 To create the graph: 1. Once the data are entered, select the following four rows using the CTRL key to select non-contiguous cells: Volume, Revenue, Fixed Costs, and Total Cost. This means you select Rows 25, 26, 28 and 29: Column B through Column O. 2. Select the Insert tab, select "scatter or bubble chart" from the chart menu, then click "Scatter with Smooth Lines and Markers." Right click and move the chart to the Graph tab. We Pogo We Ston w Color Recommended tom My Add Recommended Chart 30 MO CD Schwith that Utah .Como auf das 3. On the Design tab, select "Add Chart Element then select "Chart Title" then select "Above Chart." Add the title "Breakeven." 11 4. On the Design tab, select "Add Chart Element", then select "Axis Titles" and then select "Primary Horizontal"; label the x axis as "Units". Cele De I! MOR Coon . D + Cost-Volume-Profit Analysis Using Excel for Cost-Volume-Profit (CVP) Analysis The Oceanside Garden Nursery buys flowering plants in four-inch pots for $1.50 each and sells them for $3.00 each Management budgets monthly fixed costs of $2,600 for sales volumes between 0 and 7,500 plants. Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong. 3 Requirements: 1. Use the contribution margin approach to compute the company's monthly breakeven point in units. 2. Use the contribution margin ratio approach to compute the breakeven point in sales dollars. 3. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000. 4. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000. 5. Use the contribution margin approach to compute the margin of safety (in units) using the target operating income of $6,000. 6. Use the high low method and the units and associated total costs from Requirement 3 if targeted operating income was $6,000 and the units and associated total costs if targeted operating income was 15 $7,000 to develop the mixed cost formula for our flowering plants business. 7. Prepare a graph of the company's CVP relationships. Include the sales revenue line, the fixed cost line, 16 and the total cost line by completing the table below. Create a chart title and label the axes. 17 4 5. Chartashstance Create a table to compute the revenue andable costs, fixed costs, and total costs for each volume to use in creating your prap 2 20 400 200 2.400 000 2.000 1,000 1.400 1.800 1,600 30 31 13 Volume Hevone Variable costs Trund Costs Total Cont 34 DATA (from instructions) Description Amount Sales price per unit Variable cost per unit Contribution margin per unit Total fixed costs Profit at breakeven Target profit Requirement 1 Use the contribution margin approach to compute the company's monthly breakeven in units. Reference the cell(s) in the DATA table above when constructing your breakeven formula below. Do not use target profit in this calculation. Format as a number. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Breakeven in Units Requirement 2 Use the contribution margin ratio approach to compute the breakeven point in sales dollars. Reference the DATA cell(s) in your formula for contribution margin ratio below. Do not use target profit in these calculations. Format the ratio as a percentage and the breakeven in dollars as accounting number format in whole dollars. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the instructions tab you will be marked wrong.) Contribution margin ratio Breakeven in Dollars Requirement 3 Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $6,000 Reference the cell(s) in the DATA table above when constructing your target sales level formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the target operating income. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Target sales level (in units) Requirement 4 Use the contribution margin approach to compute the monthly sales level (in units) required to increase the target operating income of $6,000 by 10% and increase advertising costs by $1,000. Reference the DATA cell(s) in your formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the target operating income. Target sales level (in units) Requirement 5 Use the contribution margin approach to compute the margin of safety (in units) using the target operating income of $6,000. Reference the DATA cell(s) in your formula below. Format as number. Use the Excel ROUNDUP function to obtain whole units to reach the margin of safety Margin of Safety (in units) 53 54 Requirement 6 Use the high low method and the units and associated total costs from Requirement 3 if targeted operating income was $6,000 and the units and associated total costs if targeted operating income was $7,000 to develop the mixed cost formula for our flowering plants business. Reference the DATA cell(s) in your formula below. Format appropriately. 55 56 57 58 59 60 61 High Low Method Step 1. Variable cost per unit Step 2 - Fixed Cost 63 Step 3 - Mixed Cost Formula 64 65 66 HINTS 67 Cell Hint: 04:09 | Enter the appropriate numeric values given on the instructions tab. Use an equal sign (+) and the appropriate cells previously completed in the DATA table to calculate the values that are not directly given on the instructions tab. Do not use equal sign 68 (-) 69 C35 Use the function =ROUNDUP(), to calculate the target sales level. 70 C43 Use the function =ROUNDUP(), to calculate the margin of safety. 71 72 To create the graph: 1. Once the data are entered, select the following four rows using the CTRL key to select non-contiguous cells: Volume, Revenue, Fixed Costs, and Total Cost. This means you select Rows 25, 26, 28 and 29: Column B through Column O. 2. Select the Insert tab, select "scatter or bubble chart" from the chart menu, then click "Scatter with Smooth Lines and Markers." Right click and move the chart to the Graph tab. We Pogo We Ston w Color Recommended tom My Add Recommended Chart 30 MO CD Schwith that Utah .Como auf das 3. On the Design tab, select "Add Chart Element then select "Chart Title" then select "Above Chart." Add the title "Breakeven." 11 4. On the Design tab, select "Add Chart Element", then select "Axis Titles" and then select "Primary Horizontal"; label the x axis as "Units". Cele De I! MOR Coon . D +