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I started to do some of the calculations, but I got stumped on the calculations with the percentages. Can anyone help me understand how to
I started to do some of the calculations, but I got stumped on the calculations with the percentages. Can anyone help me understand how to calculate this please?
Miller Cereals is a small milling company that makes a single brand of cereal. Recently, a business school intern recommended that the company introduce a second cereal in order to "diversify the product portfolio." Currently, the company shows an operating profit that is 20 percent of sales. With the single product, other costs were twice the cost of rent. The intern estimated that the incremental profit of the new cereal would only be 6.5 percent of the incremental revenue, but it would still add to total profit. On his last day, the intern told Miller's marketing manager that his analysis was on the company laptop in a spreadsheet with a file name, NewProduct.xlsx. The intern then left for a 12-month walkabout in the outback of Australia and cannot be reached When the marketing manager opened the file, it was corrupted and could not be opened. She then found an early (incomplete) copy on the company's backup server. The incomplete spreadsheet is shown as follows. The marketing manager then called a cost management accountant in the controller's office and asked for help in reconstructing the analysis. Required: As the management accountant, fill in the blank cells. (Do not round intermediate calculations. Round your final answers to the nearest whole number. Enter all amounts as positive values.) Miller Cereals Projected Income Statement For One Year Status Quo: % Increase Alternative: Single Product (Decrease) Two Products Difference $ 160,000 40 % $ 224,000 $ 64,000 Sales revenue Costs 44.000 : 410 % 62.000 18,000 62.000 Material Labor Rent Depreciation Utilities Other 21 % 50 % % 8,400 8,400 5,400 % 1,200 Total costs Operating profit %Step by Step Solution
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