Hello,

For this project you answered for another student, can you please enter in the formulas you used to get the answers on the side on template please?

Thank you.

GOLDEN WEST COLLEGE ACCT 102 - PROJECT Chapter 18 - CT18-2 The condensed income statement for the Peri and Paul partnership for 2014 is as follows. PERI AND PAUL COMPANY Income Statement For the Year Ended December 31, 2014 Sales (240,000 units) $ 1,200,000 Cost of goods sold $ 800,000 Gross profit $ 400,000 Operating expenses Selling $ 280,000 Administrative $ 150,000 $ 430,000 $ (30,000) Net loss A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable. Instructions (Round to nearest unit, dollar, and percentage, where necessary. Use the CVP income statement format in computing profits.) a) b) c) d) Compute the break-even point in total sales dollars and in units for 2014. Peri has proposed a plan to get the partnership \"out of the red\" and improve its profitability. She feels that the quality of the product could be substantially improved by spending $0.25 more per unit on better raw materials. The selling price per unit could be increased to only $5.25 because of competitive pressures. Peri estimates that sales volume will increase by 25%. What effect would Peri's plan have on the profits and the break-even point in dollars of the partnership? (Round the contribution margin ratio to two decimal places.) Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Peri's: (1) Increase variable selling expenses to $0.59 per unit, (2) lower the selling price per unit by $0.25, and (3) increase fixed selling expenses by $40,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made. What effect would Paul's plan have on the profits and the break-even point in dollars of the partnership? Which plan should be accepted? Explain your answer. GOLDEN WEST COLLEGE ACCT 102 - PROJECT a) The variable costs PER UNIT are: Cost of Goods Sold $ 2.50 Selling Expenses $ 0.49 Administrative Expenses $ 0.25 $ 3.24 Cost of Goods Sold $ 200,000 Selling Expenses $ 162,400 Administrative Expenses $ 90,000 $ 452,400 $ 5.00 Selling price per unit $ 5.00 Variable price per unit $ 3.24 $ 1.76 Variable Cost Per Unit: Formula. Fixed costs (TOTAL) are: Total Fixed Costs: Selling price PER UNIT: Contribution margin PER UNIT: Contribution margin per unit: Contribution margin ratio: 35.20% ANALYSIS: Break-even dollars: Fixed cost divided by contributon margin ratio: $ 1,285,227 Break-even units: Fixed cost divided by contribtuon margin per unit: 257,045 04/07/2017 15:52:34 Page: 2 of 6 Formu GOLDEN WEST COLLEGE ACCT 102 - PROJECT b) Variable UNIT cost of goods sold: $ Sales volume: (Number of units) 2.75 300,000 Total Sales: (Sales dollars per unit x total sales units) $ 1,500,000 $ 1,500,000 Cost of Goods Sold $ 825,000 Selling Expenses $ 1,575,000 Advministrative Expenses $ 75,000 Total Variable Expenses $ 2,475,000 $ (975,000) Cost of Goods Sold $ 200,000 Selling Expenses $ 162,400 Advministrative Expenses $ 90,000 Total Fixed Expenses $ 452,400 $ (1,427,400) Net Income Computation: Sales Variable Expenes Contribution Margin: Formula, Formula, D Fixed Expense Net Income ANALYSIS: Break-even Dollars: Contribution margin ratio: Break-even Dollars: -65.00% $ (696,000) Variable cost per unit: $ 8.25 Contribution margin per unit: $ (3.25) Break-even Units: Break-even Units: (139,200) 04/07/2017 15:52:34 Page: 3 of 6 Formula, D Formula 04/07/2017 15:52:34 Page: 4 of 6 GOLDEN WEST COLLEGE ACCT 102 - PROJECT c) Sales $ 1,824,000 Cost of Goods Sold $ 960,000 Selling Expenses $ 226,560 Advministrative Expenses $ 96,000 Total Variable Expenses $ 1,282,560 Formula, D $ 541,440 Formula, D Cost of Goods Sold $ 200,000 Selling Expenses $ 202,400 Advministrative Expenses $ 90,000 Total Fixed Expenses $ 492,400 Formula, $ 49,040 Formula Variable Expenes Contribution Margin: Fixed Expense Net Income ANALYSIS: New Sales Volume: (Units) 384,000 Break-even Dollars: Contribution margin ratio: Break-even Dollars: 29.68% $ 1,658,794 Variable cost per unit: $ 3.34 Contribution margin per unit: $ 1.41 Break-even Units: Break-even Units: 349,220 04/07/2017 15:52:34 Page: 5 of 6 GOLDEN WEST COLLEGE ACCT 102 - PROJECT d) Analysis: (A few sentences will be fine...) What plan would you recommend and why? Plan C because it increases the net income and the contribution margin as well. 04/07/2017 15:52:34 Page: 6 of 6