I See The Light ed Income Statement Ending December 31, 20x1 1,125,000 723,250 401,750 Sales 25,000 lamps 45 Cost of Goods Sold 28.93 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) 3.15 Administrative Expenses Total Selling and Administrative Expenses: Net Profit 23,000 78,750 101.750 40.750 142.500 259 250 I See The Light cted Balance Sheet December 31, 20x1 34,710 67,500 Current Assets Cash Accounts Receivable Inventory Raw Material Figurines Electrical Sets Work in Process Finished Goods Total Current Assets 500 9.2 500 1.25 0 3000 28.925 4,600 625 0 86,775 194,210 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 20,000 6,800 13,200 207,410 54,000 54,000 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity 12,000 141,410 153,410 207,410 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Figurines $9.2000000 per lamp Electrical Sets 1.25 per lamp Lamp Shade 6 per lamp Direct Labor: 2.25 per lamp (4 lamps/hr.) Variable Overhead: 0.225 per lamp Fixed Overhead: 10 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $28.9250000 per lamp Expected increases for 20x2 When calculating projected increases round to SEVEN decimal places, 0.0000000 1. Material Costs are expected to increase by 3.50% 2. Labor Costs are expected to increase by 3.00%. 3. Variable Overhead is expected to increase by 2.00% 4. Fixed Overhead is expected to increase to $270,000 5. Fixed selling expenses are expected to be $29,000 in 20x2. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 2.50% 7. Fixed Administrative expenses are expected to increase by $4,000. The total administrative expenses for 20x0 were $40,625.00, when 22,500 units were sold. Use the High-Low method to calculate the total fixed administrative expense. 8. Variable administrative expenses (measured on a per lamp basis) are expected to increase by 2.50%. The total administrative expenses for 20x0 were $40,625.00, when 22,500 units were sold. Use the High-Low method to calculate the variable administrative expense per lamp. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3. 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Figurines Electrical Sets Lamp Shade Labor Variable Overhead 9.2 1.25 6 2 25 0.225 Projected Percent 20x2 Cost Rounded to 7 Increase Decimal Places 3.50% $9.5220000 3.50% $1.2937500 3.50% $6.2100000 3.00% $2.3175000 2.00% $0.2295000 $4.01) $4.02) $4.03) 14.05) Projected Variable Manufacturing Cost Per Unit 18.925 $19.5727500 14.06) Total Variable Cost Per Unit 20x1 Cost Projected Percent 20x2 Cost Rounded to 7 Increase Decimal Places 2.50% 3.2287500 2.50% Variable Selling Variable Administrative 20x1 Variable Administrative 20x2 3.15 0.2295000 (4.07) {4.08 (4.09 Projected Variable Manufacturing Unit Cost Projected Total Variable Cost Per Unit 19.57275 22.8527500 14.06) {4.10) Schedule of Fixed Costs 20x1 Cost Projected Increase 20x2 Cost Rounded to 2 Decimal Places 270,000 14.11) lamps @) 29,000 14.121 Fixed Overhead (normal capacity of Fixed Selling Fixed Administrative 20x1 Fixed Administrative 20x2 Projected Total Fixed Costs 342,500 (4.15) I See The Light ed Income Statement Ending December 31, 20x1 1,125,000 723,250 401,750 Sales 25,000 lamps 45 Cost of Goods Sold 28.93 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) 3.15 Administrative Expenses Total Selling and Administrative Expenses: Net Profit 23,000 78,750 101.750 40.750 142.500 259 250 I See The Light cted Balance Sheet December 31, 20x1 34,710 67,500 Current Assets Cash Accounts Receivable Inventory Raw Material Figurines Electrical Sets Work in Process Finished Goods Total Current Assets 500 9.2 500 1.25 0 3000 28.925 4,600 625 0 86,775 194,210 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 20,000 6,800 13,200 207,410 54,000 54,000 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity 12,000 141,410 153,410 207,410 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Figurines $9.2000000 per lamp Electrical Sets 1.25 per lamp Lamp Shade 6 per lamp Direct Labor: 2.25 per lamp (4 lamps/hr.) Variable Overhead: 0.225 per lamp Fixed Overhead: 10 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $28.9250000 per lamp Expected increases for 20x2 When calculating projected increases round to SEVEN decimal places, 0.0000000 1. Material Costs are expected to increase by 3.50% 2. Labor Costs are expected to increase by 3.00%. 3. Variable Overhead is expected to increase by 2.00% 4. Fixed Overhead is expected to increase to $270,000 5. Fixed selling expenses are expected to be $29,000 in 20x2. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 2.50% 7. Fixed Administrative expenses are expected to increase by $4,000. The total administrative expenses for 20x0 were $40,625.00, when 22,500 units were sold. Use the High-Low method to calculate the total fixed administrative expense. 8. Variable administrative expenses (measured on a per lamp basis) are expected to increase by 2.50%. The total administrative expenses for 20x0 were $40,625.00, when 22,500 units were sold. Use the High-Low method to calculate the variable administrative expense per lamp. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3. 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Figurines Electrical Sets Lamp Shade Labor Variable Overhead 9.2 1.25 6 2 25 0.225 Projected Percent 20x2 Cost Rounded to 7 Increase Decimal Places 3.50% $9.5220000 3.50% $1.2937500 3.50% $6.2100000 3.00% $2.3175000 2.00% $0.2295000 $4.01) $4.02) $4.03) 14.05) Projected Variable Manufacturing Cost Per Unit 18.925 $19.5727500 14.06) Total Variable Cost Per Unit 20x1 Cost Projected Percent 20x2 Cost Rounded to 7 Increase Decimal Places 2.50% 3.2287500 2.50% Variable Selling Variable Administrative 20x1 Variable Administrative 20x2 3.15 0.2295000 (4.07) {4.08 (4.09 Projected Variable Manufacturing Unit Cost Projected Total Variable Cost Per Unit 19.57275 22.8527500 14.06) {4.10) Schedule of Fixed Costs 20x1 Cost Projected Increase 20x2 Cost Rounded to 2 Decimal Places 270,000 14.11) lamps @) 29,000 14.121 Fixed Overhead (normal capacity of Fixed Selling Fixed Administrative 20x1 Fixed Administrative 20x2 Projected Total Fixed Costs 342,500 (4.15)