Lunch $6.00 60% Labe's Pet Supplies Pre Forma Contribution Margin income Samment For the month anding line 30 $10.00 ASSUMPTIONS Product Al Sales price per unit Variable costs per unit Product Cost Sales Commission Shipping and Handling Total variable cost per unit Unit CM | Brown point in units in due 250.00 $2,500.00 $1.00 $1.00 $2.00 $4.00 Sale Price Less: Variable Cest Contribution Man Les Fixed cost Operating Income $2,000.00 $800.00 $1,200.00 Product 2 $3,000.00 $1,800.00 $1,200.00 Teal $5,000.00 $2,600.00 $2,400.00 $1,500.00 $900.00 Tengt profit volume in units in de Monthly volume 158.00 $15,810.00 $200.00 WACM X 48% Terms $30.00 Product 2: Sales price per unit Variable costs per unit Productos Sales Commission Shipping and Handling Total variable cost per unit $12.00 40% $7.00 $3.00 $8.00 $18.00 Unit CM CM Brow point in units in due CM per unit 125.00 $3,750.00 Calculation of Wahod a CM ger unit Boedd Peedu $6.00 $12.00 $200.00 $100.00 $1,200.00 $1,200.00 Lear $18.00 $300.00 $2,400.00 Contribution Marin Monthly volume $100.00 Target profit volume in units in sales and 792.00 $23.760.00 WACM/unit $8.00 Fixed coses per month Work Contract Enby fou Total fixed costs or month $1,000.00 $500.00 $1,500.00 Multiproduct Brave point Hin unit Sales revue abradov Product Product 125 63 $1,250.00 $1875.00 Teal 188 $3125.00 Target profit per month $8,000.00 Essected chain wolume 5% Multiproduct Typrofit point in units Serve profit Pred2 792 396 $7.917.00 $11825.00 Learl 1,188 $19,792.00 Margin of Stay On $) $16,667 Margin of Sky 98 Operating Leverage Factor 2.67 Espected change in operating income 13% 1. Save a copy of your original model to a new spreadsheet called "supplier cost increase". Say the supplier is expected to increase the cost of the products by 20%. What is the new operating income? What is the new WACM%? What is the new MOS%? Briefly explain your findings to the client. 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say the monthly sales volume is now expected to be 175 "Treat-times" and 125 "Launch-its" (same total units, but a different sales mix). What is the new operating income? What is the new WACM/unit ? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $1,500 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. NEW ORIGINAL Change Operating income Brief explanation: WACM percentage MOS% Operating income Brief explanation: WACM/unit Units to earn target profit Operating income Brief explanation: Operating leverage factor Expected % change in op inc Lunch $6.00 60% Labe's Pet Supplies Pre Forma Contribution Margin income Samment For the month anding line 30 $10.00 ASSUMPTIONS Product Al Sales price per unit Variable costs per unit Product Cost Sales Commission Shipping and Handling Total variable cost per unit Unit CM | Brown point in units in due 250.00 $2,500.00 $1.00 $1.00 $2.00 $4.00 Sale Price Less: Variable Cest Contribution Man Les Fixed cost Operating Income $2,000.00 $800.00 $1,200.00 Product 2 $3,000.00 $1,800.00 $1,200.00 Teal $5,000.00 $2,600.00 $2,400.00 $1,500.00 $900.00 Tengt profit volume in units in de Monthly volume 158.00 $15,810.00 $200.00 WACM X 48% Terms $30.00 Product 2: Sales price per unit Variable costs per unit Productos Sales Commission Shipping and Handling Total variable cost per unit $12.00 40% $7.00 $3.00 $8.00 $18.00 Unit CM CM Brow point in units in due CM per unit 125.00 $3,750.00 Calculation of Wahod a CM ger unit Boedd Peedu $6.00 $12.00 $200.00 $100.00 $1,200.00 $1,200.00 Lear $18.00 $300.00 $2,400.00 Contribution Marin Monthly volume $100.00 Target profit volume in units in sales and 792.00 $23.760.00 WACM/unit $8.00 Fixed coses per month Work Contract Enby fou Total fixed costs or month $1,000.00 $500.00 $1,500.00 Multiproduct Brave point Hin unit Sales revue abradov Product Product 125 63 $1,250.00 $1875.00 Teal 188 $3125.00 Target profit per month $8,000.00 Essected chain wolume 5% Multiproduct Typrofit point in units Serve profit Pred2 792 396 $7.917.00 $11825.00 Learl 1,188 $19,792.00 Margin of Stay On $) $16,667 Margin of Sky 98 Operating Leverage Factor 2.67 Espected change in operating income 13% 1. Save a copy of your original model to a new spreadsheet called "supplier cost increase". Say the supplier is expected to increase the cost of the products by 20%. What is the new operating income? What is the new WACM%? What is the new MOS%? Briefly explain your findings to the client. 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say the monthly sales volume is now expected to be 175 "Treat-times" and 125 "Launch-its" (same total units, but a different sales mix). What is the new operating income? What is the new WACM/unit ? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $1,500 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. NEW ORIGINAL Change Operating income Brief explanation: WACM percentage MOS% Operating income Brief explanation: WACM/unit Units to earn target profit Operating income Brief explanation: Operating leverage factor Expected % change in op inc