High-Low Method; Contribution Format Income Statement - Excel 2 n PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In 11 A % M Alignment Number Conditional Format as Cell Formatting Table* Styles* Cells Editing . Styles FILE HOME INSERT Calibri Paste BIU- Clipboard Font A1 Jay Corporation has decided to prepare contribution income statements for > A B C D E F 1 lay Corporation has decided to prepare contribution income statements for internal planning. 2 3 Budgeted information for Quarter 1 of Year 3: 4 Sales in units 5 Sales price per unit S 17,000 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. 8 Variable Cost of Goods Sold (per unit) $ 29.00 9 Sales Commissions (per dollar of sales) 9.50% 10 11 Fixed Manufacturing Overhead (per quarter) $ 45,000.00 12 Administrative Salaries (per quarter) $ 13 Depreciation Expense (per quarter) $ 27,000.00 36,000.00 14. 15 Shipping Cost has been determined to be mixed with the following costs for the past two years: 16 17 Year 1 18 Quarter 1 19 Quarter2 20 Quarter 3 21 Quarter 4 22 Year 2 23 Quarter 1 24 Quarter2 Sheet1 READY Total Cost Units ssss $ 67,000.00 12,500 94,000.00 21,000 89,800.00 13,800 92,600.00 20,000 SS 72,500.00 13,700 80,000.00 14,000 4 100% A 23 22 Year 2 22 Quarter 1 24 Quarter2 25 Quarter 3 26 Quarter 4 27 28 Use the data to answer the following. 29 B C SSS 72,500.00 80,000.00 84,000.00 13,700 14,000 14,300 $ 100,00 + 22,500 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 32 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable shipping cost per unit 38 Total Shipping Cost Units per unit 39 Fixed shipping cost: (Note: please use the highest activity point to compute the total fixed cost.) 40 Total shipping cost at high level of activity 41 Less: Variable shipping cost at high level of activity 42 Total fixed shipping cost 43 D E 44 2. Prepare a contribution margin income statement for Quarter 1 of Year 3. 45 46 47 48 49 Jay Corporation Budgeted Income Statement For Year 3, Quarter 1 50 Sales 51 Variable expenses: 52 Cost of goods sold 53 Sales commissions 54 Shipping expense (Variable portion) 55 Total variable expenses 56 Contribution margin 57 Fixed expenses: 58 Fixed Manufacturing Overhead 59 Administrative Salaries 60 Shipping expense (Fixed portion) 61 Depreciation expense 62 Total fixed expenses 63 Net operating income 64 65 66 READY Sheet1 + 100%