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I don't know how to make the variable income statements and other statements required for the following data; Price Categories A B C D E
I don't know how to make the variable income statements and other statements required for the following data;
Price Categories | |||||
A | B | C | D | E | |
Units Sold | 2,000 | 1,000 | 500 | 400 | 400 |
Units Purchased | 3,000 | 1,200 | 1,000 | 1,000 | 1,000 |
Resale Price | $4.00 | $15.00 | $25.00 | $45.00 | $40.00 |
Cost | $0.50 | $5.00 | $10.00 | $20.00 | $20.00 |
In addition to purchasing inventory (used books), the company incurs some operating expenses.
Variable operating expenses | ||
Shipping per book | $ 1.50 | |
Fixed expenses | ||
Internet-related costs | $5,000 | |
Travel, etc. | 2,000 | |
Advertising | 1,000 | |
Other overhead | 3,000 |
Required:
Computations (use Excel)
- Prepare a segmented variable costing (behavioral) income statement for the company in good format.
- Prepare a second variable costing statement assuming 90% of all the books in each category purchased were actually sold.
- Prepare a third variable costing statement assuming that the price is increased by 50% for all five categories (use original sales information).
- The owner enjoys the used-book business. Any suggestions as how to turn this into a full-time business venture so the owner can quit his other job? Prepare another income statement to support your idea.
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