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B F H I See The Light Projected Income Statement For the Period Ending December 31, 20x1 750,000.00 $ 375,000.00 Sales 25,000 lamps Cost of Goods Sold Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses Fixed Variable @ $2.00 Total Selling and Administrative Expenses Net Profit # 75,000.00 $ 98,000.00 50,000.00 92.000.00 190,000.00 $ 185,000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 213.410.00 8 9 0 50 01 02 03 14 14 15 16 17 18 28 29 30 31 32 33 34 35 36 $ 54,000.00 $ 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147 410.00 159.410.00 $ 213,410 00 3 4 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations 5 6 14 The projected cost of a lamp is calculated based upon the projected increases or decreases to 15 current costs. The present costs to manufacture one lamp are: 16 17 Lamp Kit $16.0000000 per lamp 26 Direct Labor 2.0000000 per lamp (4 lamps/hr.) 27 Variable Overhead 2.0000000 per lamp 28 Fixed Overhead 10.0000000 per lamp (based on normal capacity of 25,000 lamps) 29 36 Cost per lamp $30,0000000 per lamp 37 38 Expected increases for 20x2 39 When calculating projected increases round to TWO (50.00) decimal places 40 1. Material Costs are expected to increase by 6.50% 2. Labor Costs are expected to increase by 3.00%. 47 48 49 50 51 58 59 3. Variable Overhead is expected to increase by 3.50% 4. Fixed Overhead is expected to increase to $260.000 Expected increases for 20x2 When calculating projected increases round to TWO (50.00) decimal places. 1. Material Costs are expected to increase by 6.50%. 2. Labor Costs are expected to increase by 3.00%. 3. Variable Overhead is expected to increase by 3.50%. 3 3 4. Fixed Overhead is expected to increase to $260,000 1 5. Fixed Administrative expenses are expected to increase to $58,000. 9 6. Variable selling expenses (measured on a per lamp basis) are expected to increase 0 by 200% 1 2 7. Fixed selling expenses are expected to be $39,000 in 20x2. -3 30 8. Variable administrative expenses (measured a per lamp basis) are expected to 31 increase by 5.00% 32 33 On the following schedule develop the following figures: 34 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp, 91 92 2- 20x2 Projected Variable Unit Cost per lamp 93 94 3- 20x2 Projected Fixed Costs 95 LA 4 5 1 See The Light, Inc Schedule of Projected Costs 6 7 8 10 Vanable Manufacturing Unit Cost 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places $1704 $2.06 $2.07 (401) {402) (403) 11 12 Lamp kit 13 Labor 14 Variable Overhead 16 17 Projected Variable Manufacturing Cost Per Unit 18 19 20 22 Total Variable Cost Per Unit $21.17 (404) 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places 23 24 Variable Selling 25 Variable Administrative 25 Projected Variable Manufacturing Unit Cost 28 29 30 Projected Total Vanable Cost Per Unit {4.05) 14.063 (404) 14.07) 2. Total Variable Cost Per Unit 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places {405) (406) (404) 3 24 Variable Selling 25 Variable Administrative 26 Projected Variable Manufacturing Unit Cost 28 29 30 Projected Total Variable Cost Per Unit 31 32 34 35 Schedule of Fixed Costs (4.07) 20x1 Cost 20x2 Cost Projected Percent Increase 36 {408) lamps @_) 33,000.00 37 Fixed Overhead 38 (normal capacity of 40 Fixed Selling 41 Fixed Administrative 42 43 Projected Total Fixed Costs {4.09) (410) (411) 46
