i have done the excel file but need help for Part B questions.
Here is the excel file
I will be very much thankful if any one can answer it.
Business Problem Scenario You have been approached by your client, Banana Industries Pty Ltd, to assist them in planning a new business venture. The business is planned to start on 1 July 2020. Banana Industries has developed a new corporate boardroom webcam system which will be competing with others for the massive uptake in videoconferencing technology due to Covid-19. Banana Industries requires you to prepare a budget and analysis of two separate scenarios they have determined to be likely, and have provided you with the following information. Scenario #1 Cost of goods per unit $3750 (excluding GST); mark-up 65%; expected annual sales 410 units.8% of sales revenue (excluding GST) will be spent on marketing and advertising costs. Expenses (excluding GST) Sales staff: 2 positions, $40,000 annual salary each (including superannuation). Sales commissions: 4% of sales (excluding GST). Admin' staff: 1 manager ($95,000], 1 bookkeeper [$55,000), 1 receptionist ($40,000), all salaries given are annual and include superannuation. Rent: $12,000 per month Other operating costs: $5500 per month. Delivery costs: $130 per unit sold Assets (excluding GST) Office furniture: Cost $75,000; expected residual $0; useful life 8 years; depreciation method straight-line; installed on 1 July 2020. Factory equipment: Cost $775,000; expected residual $25,000; useful life 8 years; depreciation method straight-line; installed ready for use 31 July 2020. Computers: Cost $65,000; expected residual $0; useful life 4 years; depreciation method reducing balance; installed ready for use 15 July 2020. Loan from Big Bank Banana Industries will borrow $300,000 at 4.5% p.a.compounding monthly. Repayments will be made each month, over a four-year loan term. The loan start date will be 1 July 2020. Scenario #2 The marketing department at Banana Industries believes that by selling a slightly higher quality webcam system, a higher price and mark-up would be acceptable in the market. They have estimated that with an increased cost per unit ($3900) a mark-up of 70% would be achievable. To support this price increase, marketing and advertising expenditure would increase from 8% to 11%. Annual sales are expected to increase by 10 units compared to scenario #1. Your Tasks: Part A (using the excel file provided on the Moodle] 1) Calculate the GST exclusive and GST inclusive sales price for each boardroom webcam. 2) Calculate interest expense, and depreciation expense, on the separate sheets included in the Excel file on Moodle. Don't forget to include these expenses in your P&L in the next step. 3) Produce a projected profit and loss statement for the financial year ending 30-June-2021 for each of the two scenarios. 4) Calculate on the P&L sheet, the tax payable for Banana Industries Pty Ltd (a 'base-rate' entity), and Net Profit After Tax, for each of the two scenarios. Note: For interest, depreciation, and the P&L generally, calculations to the nearest whole dollar are acceptable. For the price calculations in part A(1), and the tax/NPAT calculations at the end of the P&L, cents may be necessary. Part B [create your report in MS Word) 1) Advise your client on which scenario should be selected. Explain and justify why you would advise this selection (approx. 150 words). 2) Comment on any variances between the scenarios (approx. 150 words). 3) Explain the difference between straight-line depreciation and reducing balance depreciation to your client. Reference any materials cited (approx. 150 words). 4) Prepare break-even analysis on the scenario you recommended in part B(1) above: a. Calculate the break even analysis mathematically. b. Show the break even analysis graphically. C. Explain break-even analysis and why it is an important tool for business. (References required) (approx. 250 words). 5) Produce a Pie Graph showing the break-up of all expenses in the under the scenario recommended in part B[1] above. Comment on the pie graph (approx. 100 words). 6) From your analysis provide your recommendation to the client with supporting evidence (hints: consider contribution margins, NP and GP analysis, and the current economic outlook). Scenario 2 B Projected Projected Profit and Loss: 2020-21 Scenario 1 Unit Calculations Cost of Goods (per unit) 3750 Mark up 65% Sales Price (GST Excl) 6,187.50 7 GST 10% 8 Sales Price (GST incl) 6,806.25 9 10 Number of Units 410 11 12 13 3900 70% 6,630.00 10% 7,293.00 420 $ 14 Revenue 15 Less: Cost of Goods Sold 16 GROSS PROFIT 2,536,875 $ 1,537,500 999,375 2,784,600 1,638,000 1,146,600 17 18 Expenses Scenario Planning Deprecation Calculations Interest calculation B C 1,146,600 999,375 16 GROSS PROFIT 17 18 Expenses 19 Wages (sales staff] 20 Commission 21 Wages (admin staff] 22 Depreciation - Factory equipment 23 Depreciation - Computers 24 Depreciation - Office fit out 25 Marketing 26 Rent 27 Operating costs 28 Delivery costs 29 Interest 30 TOTAL EXPENSES 31 80,000 101,475 190,000 85,938 15,573 9,375 202,950 144,000 66,000 53,290 12,067 960,678 80,000 111,384 190,000 85,938 15,573 9,375 306,306 144,000 66,000 54,600 12,067 1,075,243 38,697 71,357 32 NET PROFIT 33 Scenario Planning Resde Depreciation calculations Interest calculation A B 53,300 12,067 960,678 54,600 12,067 1,075,243 28 Delivery costs 29 Interest 30 TOTAL EXPENSES 31 32 NET PROFIT 33 34 Company Tax Rate 35 Company Tax Payable 36 38,697 71,357 26.0% 26.0% 18,552.82 10,061.22 37 NPAT 28,635.78 52,804.18 38 39 40 41 + 42 43 44 45 Scenario Planning Depreciation Calculations Interest calculation D E 0 8 A 1 Depreciation Work sheet (for the entire life of each asset) 2 Office Furniture 3 Cost 75000 4 Salvage 5 Life 8 6 Depreciation Office Furniture $9,375.00 7 8 Factory Equipment 9 Cost 775000 10 Salvage 25000 11 Life 12 Depreciation Factory Equipment $93,750 $85,938 13 14 Computers 15 Cost 65000 16 Salvage 0 17 Life 4 18 Depreciation Computers 16250 15573 19 20 21 22 23 24 25 26 + Scenario Planning Depreciation Calculations Interest calculation F G E D A B 1 Calcuation of interest on loan 2 3 4 Date Loan Rate Number of Month Monthly repayment 1-Jul-20 $300,000 0.375% 48 $6,841.05 $12,067 5 6 7 8 9 Period Number 10 1 11 2 12 3 13 4 14 5 15 6 16 7 17 8 18 9 19 10 20 11 21 12 22 13 23 14 24 15 25 16 26 17 Opening Balance Add interest Repayments Closing Balance $300,000 $1,125 $6,841.05 294283.95 $294,284 $1,104 $6,841.05 288546.47 $288,546 $1,082 $6,841.05 282787.48 $282,787 $1,060 $6,841.05 277006.88 $277,007 $1,039 $6,841.05 271204.61 $271,205 $1,017 $6,841.05 265380.59 $265,381 $995 $6,841.05 259534.72 $259,535 $973 $6,841.05 253666.93 $253,667 $951 $6,841.05 247777.13 $247,777 $929 $6,841.05 241865.25 $241,865 $907 $6,841.05 235931.20 $235,931 $885 $6,841.05 229974.89 $229,975 $862 $6,841.05 223996.25 $223,996 $840 $6,841.05 217995.19 $217,995 $817 $6,841.05 211971.63 $211,972 $795 $6,841.05 205925.48 $205,925 $772 $6,841.05 199856.65 Scenario Planning Depreciation Calculations Interest calculation A B D F G 18 9 10 19 20 21 22 23 11 12 13 14 15 16 24 25 26 27 17 18 19 20 28 29 30 31 32 33 34 35 36 37 38 39 40 $253,667 $247,777 $241,865 $235,931 $229,975 $223,996 $217,995 $211,972 $205,925 $199,857 $193,765 $187,651 $181,513 $175,353 $169,169 $162,963 $156,733 $150,480 $144,203 $137,903 $131,579 $125,231 $118,860 $112,464 $106,045 $99,602 21 22 23 24 25 26 27 28 29 30 E $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $951 $929 $907 $885 $862 $840 $817 $795 $772 $749 $727 $704 $681 $658 $634 $611 $588 $564 $541 $517 $493 $470 $446 $422 $398 $374 247777.13 241865.25 235931.20 229974.89 223996.25 217995.19 211971.63 205925.48 199856.65 193765.07 187650.64 181513.29 175352.92 169169.44 162962.78 156732.85 150479.55 144202.80 137902.52 131578.61 125230.98 118859.55 112464.23 106044.92 99601.55 93134.01 41 42 43 31 32 33 34 Scenario Planning Depreciation Calculations Interest calculation A B D F G 34 35 36 37 38 39 40 41 25 26 27 28 29 30 42 43 31 32 33 34 35 36 37 38 39 40 $156,733 $150,480 $144,203 $137,903 $131,579 $125,231 $118,860 $112,464 $106,045 $99,602 $93,134 $86,642 $80,126 $73,586 $67,020 $60,431 $53,816 $47,177 $40,513 $33,824 $27,110 $20,370 $13,606 $6,815 $588 $564 $541 $S17 $493 $470 $446 $422 $398 $374 $349 $325 $300 $276 $251 $227 $202 $177 $152 $127 $102 45 46 47 48 49 50 51 52 53 54 55 56 E $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 150479.55 144202.80 137902.52 131578.61 125230.98 118859.55 112464.23 106044.92 99601.55 93134.01 86642.21 80126.07 73585.50 67020.40 60430.68 53816.25 47177.02 40512.88 33823.76 27109.56 20370.17 13605.51 6815.49 0.00 41 42 43 44 45 46 $76 47 48 $51 $26 57 58 59 Scenario Planning Depreciation Calculations Interest calculation + Business Problem Scenario You have been approached by your client, Banana Industries Pty Ltd, to assist them in planning a new business venture. The business is planned to start on 1 July 2020. Banana Industries has developed a new corporate boardroom webcam system which will be competing with others for the massive uptake in videoconferencing technology due to Covid-19. Banana Industries requires you to prepare a budget and analysis of two separate scenarios they have determined to be likely, and have provided you with the following information. Scenario #1 Cost of goods per unit $3750 (excluding GST); mark-up 65%; expected annual sales 410 units.8% of sales revenue (excluding GST) will be spent on marketing and advertising costs. Expenses (excluding GST) Sales staff: 2 positions, $40,000 annual salary each (including superannuation). Sales commissions: 4% of sales (excluding GST). Admin' staff: 1 manager ($95,000], 1 bookkeeper [$55,000), 1 receptionist ($40,000), all salaries given are annual and include superannuation. Rent: $12,000 per month Other operating costs: $5500 per month. Delivery costs: $130 per unit sold Assets (excluding GST) Office furniture: Cost $75,000; expected residual $0; useful life 8 years; depreciation method straight-line; installed on 1 July 2020. Factory equipment: Cost $775,000; expected residual $25,000; useful life 8 years; depreciation method straight-line; installed ready for use 31 July 2020. Computers: Cost $65,000; expected residual $0; useful life 4 years; depreciation method reducing balance; installed ready for use 15 July 2020. Loan from Big Bank Banana Industries will borrow $300,000 at 4.5% p.a.compounding monthly. Repayments will be made each month, over a four-year loan term. The loan start date will be 1 July 2020. Scenario #2 The marketing department at Banana Industries believes that by selling a slightly higher quality webcam system, a higher price and mark-up would be acceptable in the market. They have estimated that with an increased cost per unit ($3900) a mark-up of 70% would be achievable. To support this price increase, marketing and advertising expenditure would increase from 8% to 11%. Annual sales are expected to increase by 10 units compared to scenario #1. Your Tasks: Part A (using the excel file provided on the Moodle] 1) Calculate the GST exclusive and GST inclusive sales price for each boardroom webcam. 2) Calculate interest expense, and depreciation expense, on the separate sheets included in the Excel file on Moodle. Don't forget to include these expenses in your P&L in the next step. 3) Produce a projected profit and loss statement for the financial year ending 30-June-2021 for each of the two scenarios. 4) Calculate on the P&L sheet, the tax payable for Banana Industries Pty Ltd (a 'base-rate' entity), and Net Profit After Tax, for each of the two scenarios. Note: For interest, depreciation, and the P&L generally, calculations to the nearest whole dollar are acceptable. For the price calculations in part A(1), and the tax/NPAT calculations at the end of the P&L, cents may be necessary. Part B [create your report in MS Word) 1) Advise your client on which scenario should be selected. Explain and justify why you would advise this selection (approx. 150 words). 2) Comment on any variances between the scenarios (approx. 150 words). 3) Explain the difference between straight-line depreciation and reducing balance depreciation to your client. Reference any materials cited (approx. 150 words). 4) Prepare break-even analysis on the scenario you recommended in part B(1) above: a. Calculate the break even analysis mathematically. b. Show the break even analysis graphically. C. Explain break-even analysis and why it is an important tool for business. (References required) (approx. 250 words). 5) Produce a Pie Graph showing the break-up of all expenses in the under the scenario recommended in part B[1] above. Comment on the pie graph (approx. 100 words). 6) From your analysis provide your recommendation to the client with supporting evidence (hints: consider contribution margins, NP and GP analysis, and the current economic outlook). Scenario 2 B Projected Projected Profit and Loss: 2020-21 Scenario 1 Unit Calculations Cost of Goods (per unit) 3750 Mark up 65% Sales Price (GST Excl) 6,187.50 7 GST 10% 8 Sales Price (GST incl) 6,806.25 9 10 Number of Units 410 11 12 13 3900 70% 6,630.00 10% 7,293.00 420 $ 14 Revenue 15 Less: Cost of Goods Sold 16 GROSS PROFIT 2,536,875 $ 1,537,500 999,375 2,784,600 1,638,000 1,146,600 17 18 Expenses Scenario Planning Deprecation Calculations Interest calculation B C 1,146,600 999,375 16 GROSS PROFIT 17 18 Expenses 19 Wages (sales staff] 20 Commission 21 Wages (admin staff] 22 Depreciation - Factory equipment 23 Depreciation - Computers 24 Depreciation - Office fit out 25 Marketing 26 Rent 27 Operating costs 28 Delivery costs 29 Interest 30 TOTAL EXPENSES 31 80,000 101,475 190,000 85,938 15,573 9,375 202,950 144,000 66,000 53,290 12,067 960,678 80,000 111,384 190,000 85,938 15,573 9,375 306,306 144,000 66,000 54,600 12,067 1,075,243 38,697 71,357 32 NET PROFIT 33 Scenario Planning Resde Depreciation calculations Interest calculation A B 53,300 12,067 960,678 54,600 12,067 1,075,243 28 Delivery costs 29 Interest 30 TOTAL EXPENSES 31 32 NET PROFIT 33 34 Company Tax Rate 35 Company Tax Payable 36 38,697 71,357 26.0% 26.0% 18,552.82 10,061.22 37 NPAT 28,635.78 52,804.18 38 39 40 41 + 42 43 44 45 Scenario Planning Depreciation Calculations Interest calculation D E 0 8 A 1 Depreciation Work sheet (for the entire life of each asset) 2 Office Furniture 3 Cost 75000 4 Salvage 5 Life 8 6 Depreciation Office Furniture $9,375.00 7 8 Factory Equipment 9 Cost 775000 10 Salvage 25000 11 Life 12 Depreciation Factory Equipment $93,750 $85,938 13 14 Computers 15 Cost 65000 16 Salvage 0 17 Life 4 18 Depreciation Computers 16250 15573 19 20 21 22 23 24 25 26 + Scenario Planning Depreciation Calculations Interest calculation F G E D A B 1 Calcuation of interest on loan 2 3 4 Date Loan Rate Number of Month Monthly repayment 1-Jul-20 $300,000 0.375% 48 $6,841.05 $12,067 5 6 7 8 9 Period Number 10 1 11 2 12 3 13 4 14 5 15 6 16 7 17 8 18 9 19 10 20 11 21 12 22 13 23 14 24 15 25 16 26 17 Opening Balance Add interest Repayments Closing Balance $300,000 $1,125 $6,841.05 294283.95 $294,284 $1,104 $6,841.05 288546.47 $288,546 $1,082 $6,841.05 282787.48 $282,787 $1,060 $6,841.05 277006.88 $277,007 $1,039 $6,841.05 271204.61 $271,205 $1,017 $6,841.05 265380.59 $265,381 $995 $6,841.05 259534.72 $259,535 $973 $6,841.05 253666.93 $253,667 $951 $6,841.05 247777.13 $247,777 $929 $6,841.05 241865.25 $241,865 $907 $6,841.05 235931.20 $235,931 $885 $6,841.05 229974.89 $229,975 $862 $6,841.05 223996.25 $223,996 $840 $6,841.05 217995.19 $217,995 $817 $6,841.05 211971.63 $211,972 $795 $6,841.05 205925.48 $205,925 $772 $6,841.05 199856.65 Scenario Planning Depreciation Calculations Interest calculation A B D F G 18 9 10 19 20 21 22 23 11 12 13 14 15 16 24 25 26 27 17 18 19 20 28 29 30 31 32 33 34 35 36 37 38 39 40 $253,667 $247,777 $241,865 $235,931 $229,975 $223,996 $217,995 $211,972 $205,925 $199,857 $193,765 $187,651 $181,513 $175,353 $169,169 $162,963 $156,733 $150,480 $144,203 $137,903 $131,579 $125,231 $118,860 $112,464 $106,045 $99,602 21 22 23 24 25 26 27 28 29 30 E $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $951 $929 $907 $885 $862 $840 $817 $795 $772 $749 $727 $704 $681 $658 $634 $611 $588 $564 $541 $517 $493 $470 $446 $422 $398 $374 247777.13 241865.25 235931.20 229974.89 223996.25 217995.19 211971.63 205925.48 199856.65 193765.07 187650.64 181513.29 175352.92 169169.44 162962.78 156732.85 150479.55 144202.80 137902.52 131578.61 125230.98 118859.55 112464.23 106044.92 99601.55 93134.01 41 42 43 31 32 33 34 Scenario Planning Depreciation Calculations Interest calculation A B D F G 34 35 36 37 38 39 40 41 25 26 27 28 29 30 42 43 31 32 33 34 35 36 37 38 39 40 $156,733 $150,480 $144,203 $137,903 $131,579 $125,231 $118,860 $112,464 $106,045 $99,602 $93,134 $86,642 $80,126 $73,586 $67,020 $60,431 $53,816 $47,177 $40,513 $33,824 $27,110 $20,370 $13,606 $6,815 $588 $564 $541 $S17 $493 $470 $446 $422 $398 $374 $349 $325 $300 $276 $251 $227 $202 $177 $152 $127 $102 45 46 47 48 49 50 51 52 53 54 55 56 E $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 $6,841.05 150479.55 144202.80 137902.52 131578.61 125230.98 118859.55 112464.23 106044.92 99601.55 93134.01 86642.21 80126.07 73585.50 67020.40 60430.68 53816.25 47177.02 40512.88 33823.76 27109.56 20370.17 13605.51 6815.49 0.00 41 42 43 44 45 46 $76 47 48 $51 $26 57 58 59 Scenario Planning Depreciation Calculations Interest calculation +
