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NOVA Knights just completed the 2 0 2 2 fiscal period ( January 1 - December 3 1 ) and through management analysis and review
NOVA Knights just completed the fiscal period January December and through management analysis and review of the income statement the following information was determined: Sales Revenue of based on sales of units. Cost of Goods Sold totaled of COGS Cost of Goods Sold are variable. Selling Expenses totaled of selling expenses are variable Administrative Expenses totaled of administrative expenses are variable Rounding and Calculation Instructions Round all costs per unit to decimals FINAL breakeven answers to the unit and dollar no decimals DO NOT Round the contribution margin ratio: You will NOT maintain the same percentages of variable vs fixed costs in each of the proposed plans. "Use either Google Sheets or Excel recommended for all parts of this project. Required: formulas, functions and cell referencing throughout the project. Part Using the information above prepare, in good form, a GAAP accrual basis income statement, determine net income loss and compute the breakeven point in total sales dollars and in units for Prepare a CVP income statement format for Part plans A and B Part PLANA Lorna has proposed a plan to improve its profitability. Lorna feels that the quality of the final product could be substantially improved by spending more per unit on higher quality raw materials. The selling price per unit could be increased to Lorna projects that sales volume will increase by Compute net income under Lorna's proposal and the breakeven point in units and sales dollars. DO NOT Round the contribution margin ratio. PLAN B Anh was a sales and marketing major in college. Anh believes sales volume can be increased by using an intensive online advertising and social media promotional campaign. She proposed the following plan as an alternative to Lorna's: improve sales incentives by increasing sales commission for each sale, this will increase the following variable costs: cost of goods sold to per unit, selling expenses to per unit, administrative expenses to per units, increase the selling price per unit by and increase fixed selling expenses by Anh based her recommendations on a marketing research report that suggested that sales volume would increase by if these changes were made. Compute net income under Anh's proposal and the breakeven point in unit and sales dollars. DO NOT Round the contribution margin ratio Part Which plan do you believe should be accepted and why? Using good written communication, completely. and thoroughly explain your answer. Your score for this category will be based significantly on your persuasiveness and effectiveness to "sell" your conclusion to executives in the company.
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