I See The Light Projected Income Statement For the Period Ending December 31, 20x1 @ $30.00 $ 1,125,000.00 750,000.00 $ $ 375,000.00 Sales 25,000 lamps @ $45.00 Cost of Goods Sold Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92,000.00 190,000.00 185,000.00 $ I See The Light Projected Balance Sheet As of December 31, 20x1 , 1 2 3 4 5 5 6 7 8 9 16 17 18 19 20 27 28 29 30 31 38 39 40 41 42 49 50 51 52 53 60 61 62 63 64 71 72 73 74 75 82 83 84 85 86 93 94 95 96 97 104 105 106 107 108 109 110 111 112 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 200,210.00 $ $ Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 20,000.00 6,800.00 13,200.00 213.410.00 $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159.410.00 213.410.00 $ 4 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations 5 6 Lamp Kit: 7 8 The projected cost of a lamp is calculated based upon the projected increases or decreases to 9 current costs. The present costs to manufacture one lamp are: 10 12 $16.0000000 per lamp 15 Direct Labor: 2.0000000 per lamp (4 lamps/hr.) 16 Variable Overhead: 2.0000000 per lamp 18 Fixed Overhead: 10.0000000 per lamp (based on normal capacity of 25,000 lamps) 19 20 Cost per lamp: $30.0000000 per lamp 21 22 Expected increases for 20x2 24 When calculating projected increases round to TWO ($0.00) decimal places. 25 26 1. Material Costs are expected to increase by 4.50%. 27 28 2. Labor Costs are expected to increase by 6.00%. 30 31 3. Variable Overhead is expected to increase by 5.00%. 32 33 4. Fixed Overhead is expected to increase to $300,000. 34 36 5. Fixed Administrative expenses are expected to increase to $58,000. 37 38 6. Variable selling expenses (measured on a per lamp basis) are expected to increase 39 by 3.50%. 40 42 7. Fixed selling expenses are expected to be $41,000 in 20x2. 43 44 8. Variable administrative expenses (measured a per lamp basis) are expected to 45 increase by 2.50%. 46 48 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. 49 50 51 52 54 55 56 3- 20x2 Projected Fixed Costs. 6 7 8 9 Variable Manufacturing Unit Cost 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places 10 11 Lamp Kit 14 Labor {4.01) {4.02) {4.03) {4.04) 15 Variable Overhead 16 17 Projected Variable Manufacturing Cost Per Unit 18 21 22 23 Total Variable Cost Per Unit 20x 1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places {4.05) {4.06) {4.04} 24 25 Variable Selling 28 Variable Administrative 29 Projected Variable Manufacturing Unit Cost 30 31 32 Projected Total Variable Cost Per Unit 35 36 37 38 Schedule of Fixed Costs {4.07) 20x1 Cost 20x2 Cost Projected Percent Increase {4.08) lamps @_) {4.09) {4.10) 39 42 Fixed Overhead 43 (normal capacity of 44 Fixed Selling 45 Fixed Administrative 46 49 Projected Total Fixed Costs 50 51 52 {4.11)