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Hi I need questions a, b and c solved with the working. Please make the work as clear as possible with the used formulas. these

Hi I need questions a, b and c solved with the working. Please make the work as clear as possible with the used formulas. these are some pointers that are helpful.

  1. The main focus is the calculation of the contribution margins for each model. Please follow the format of the charts given in (Exhibit 1) by including headings for each car model as well as a totals column. Also, organize your final income statement to calculate CM. Meaning, Revenue, then VC, then CM, then FC, then a final total Net Profit. It is best to do these calculations via Excel. To complete the CM section, you will need a preliminary calculation to separate VC and FC of Labour and Maintenance. Dont forget to include limitations of your CM analysis we are looking for one relevant limitation, properly explained in a few sentences. There is no need to write long paragraphs.
  2. BE, MOS, and DOL calculation. For BE, make sure you calculate total units first, and then apply the sales mix percentage (which can also be calculated easily using the units sold information given in Exhibit 1). MOS can be calculated using physical units it does not have to converted to dollars. DOL should be in dollars however. The interpretations for both MOS and DOL should use concepts taught in lecture and in the textbook to relate to the case. Again, relevancy and conciseness is key here.
  3. Target Profit should be easy once youve completed your first initial income statement (from CM calculations). Just use that current total NI you calculated and increase it by 20% then apply the formula (again, right in your textbook). Only after that can you apply sales mix percentages. There is no need to do anything regarding tax rates.
  4. Since this case is very objective and calculation heavy, please keep in mind that most of your report should be charts, with only a few small paragraphs for the limitations and interpretations. Again, any written calculations will be penalized. No exceptions.
  5. image text in transcribedimage text in transcribed
Chapter 6: Techniques for Measuring Fixed and Variable Costs 29 6.3 Omers Incorporated Omers Incorporated is a car manufacturer that has been in business for over 60 years. The head office and manufacturing plant is located in Windsor, Ontario. The company currently manufactures a full lineup of vehicles, which includes three models of sedans, one sport utility vehicle, one minivan, and two pickup trucks. From time to time, the models are overhauled to have a new look; however, the lineup has stayed relatively stable over the last few years. It is now October 4, 20x4, and you are an accountant working in the strategic planning department for the sedans. At the end of every third quarter, the company does a financial review on the sedans. Your boss Nancy Huang, has asked you to help prepare for the review of the sedan models. A lot of information must be gathered before a thoughtful analysis can be produced. The information you provide will be just one part of a much larger analysis. She has provided you with limited information to get you started, found in Exhibit Required Nancy Huang has asked you to prepare a detailed analysis considering each of the following items. With (a) What is the contribution margin of each model? Under the current sales mix, how many of each (b) What is the margin of safety and the degree of operating leverage for each model? Include an inter- (c) How many more sedans would have to be sold to increase overall profit by 20% with a 40% tax rate? your report,provide a list of any limitations in your analysis model would be required to break even? pretation of your findings EXHIBIT 1 -SEDAN COST INFORMATION TO DATE Shadow Total name Number of cars sold 6,825,000,000 4,777,500,000 819,000,000 341,250,000 273,000,000 614,250,000 6,352,500,000 4,764,375,000 889,350,000 97,562,750 300,000 6,600,000,000 5,280,000,000 858,000,000 12,200,000 594,000,000 (244,200,000) 9,777,500,000 14,821,875,000 2,566,350,000 651,012,750 1,375,200,000 Direct materials Administrative costs Income (loss) (6,987,750 Shadow oon Total Number of cars sold 167,375 7,029,750,000 4,780,230,000 913,867,500 421,785,000 421,785,000 492,082,500 324,000 7,128,000,000 ,559,840,000 869,616,000 71,280,000 598,752,000 28,512,000 1,575 20,764,350,000 15,162,888,000 2,708,407,500 757,329,000 1,549,065,000 200,200 ue Direct 4,822,818,000 924,924,000 264,264,000 528,528,000 Maintenance Administrative costs name Shadow oon Total 184,113 7,732,725,000 5,180,925,750 914,008,095 378,903,525 471,696,225 787,191,405 Number of cars sold 218,218 7,201,194,000 5,328,883,560 993,764,772 200,841,301 648,107,460 29,596,907 353,160 7,769,520,000 5,982,530,400 932,342,400 116,542,800 755,491 22,703,439,000 16,492,339,710 2,840,115,267 696,287,626 1,725,826,245 948,870,152 Direct materials in Administrative costs 132,081,840 Total to Date Model name oon Total 513,988 21,587,475,000 14,738,655,750 2,646,875,595 1,141,938,525 1,166,481,225 1,893,523,905 977,160 21,497,520,000 16,822,370,400 2,659,958,400 00,022,800 1,798,774,560 (83,606,160) Number of cars sold 10,918 63,245,289,000 46,477,102,710 8,114,872,767 2,104,629,376 4,650,091,245 1,898,592,902 ue Direct materials 14,916,076,560 2,808,038,772 051 1,684,835,460 88,675,157 in trative costs Income (loss) 1. Labour and maintenance are mixed costs (both fixed and variable costs). 2. Administrative costs are fixed costs

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