I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x 1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places 161 Lamp Kit Labor Variable Overhead 2 5% $16.64 $2.10 $2.10 {4.01) {4.02} {4.03) 2 5% Projected Variable Manufacturing Cost Per Unit $20.84 {4.04} Total Variable Cost Per Unit 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places 3 4% 3.12 Variable Selling Variable Administrative Projected Variable Manufacturing Unit Cost 2 2.00% 2.04 20.84 {4.05) {4.06) {4.04) Projected Total Variable Cost Per Unit 26.00 {4.07) Schedule of Fixed Costs 20x1 Cost 20x2 Cost Projected Percent Increase Fixed Overhead $ 295,000.00 {4.08) 10 25000 lamps @_) (normal capacity of Fixed Selling Fixed Administrative $ 35,000.00 60,000.00 {4.09) {4.10) $ Projected Total Fixed Costs $ 390,000.00 {4.11) PART 2 Cost Volume Relationships - Profit Planning Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis based on the following assumptions. Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the number of units and then multiply by the selling price per unit. 1. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? 42.22222222 5.01 =45-26 (from 4.07) $19.00 Contribution Margin per unit (Round to two places, $##.##) {5.01) Contribution Margin Ratio (Round to four places, % is two of those places .##%) 42.22% {5.02) 2. For 20x2 the selling price per lamp will be $45.00. The desired net income in 20x2 is $190,000. What would sales in units have to be in 20x2 to reach the profit goal? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) {5.03) 3. For 20x2 the selling price per lamp will be $45.00. If the fixed cost increase by $50,000.00 how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) {5.04) 4. For 20x2 the selling price per lamp will be $45.00. If the variable cost increase by $5.00 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) {6.01) 5. For 20x2 the selling price per lamp will be $45.00. If the variable cost decreased by $5.00 a unit how many lamps must be sold to breakeven? 390000 24 16250 Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 16,250 units {6.02 6. If for 20x2 the selling price per lamp is increased to $50.00 a unit how many lamps must be sold to breakeven? 24 162501 Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 16,250 units {6.03) 7. If for 20x2 the selling price per lamp is decreased to $40.00 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) units {6.04)