PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs The present costs to manufacture one lamp are: $9.2000000 per lamp Figurines Electrical Sets Lamp Shade Direct Labor Variable Overhead: 1.2500000 per lamp 6.0000000 per lamp 2.2500000 per lamp (4 lamps/hr.) 0.2250000 per lamp 10.0000000 per lamp (bssed on normal capacity of 25,000 lamps) Fixed Overhead Cost per lamp Expected increases for 20x2 When calculating projected increases round to SEVEN decimal places, $0.0000000. 1 Material Costs are expected to increase by 5.00% 2, Labor Costs are expected to increase by 6.00%. 3 Variable Overhead is expected to increase by 4.50% 4. Fixed Overhead is expected to increase to $285,000. 5. Fixed Administrative expenses are expected to increase to $60,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 3.50%. 7. Fixed selling expenses are expected to be $37,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 6.50% 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. 3- 20x2 Projected Fixed Costs. Page 2 l See The Light Projected Income Statement For the Period Ending December 31, 20x1 Sales Cost of Goods Sold Gross Profit Selling Expenses 25,000 lamps $45.00 $28.93 S 1.125,000.00 723,250.00 $ 401,750.00 Fixed $23,000.00 78,750.00 (Commission per unit) @ $3.15 Administrative Expenses $ 101.750.00 Fixed Variable $ 42,000.00 $0.06 1,500.00 43,500,00 Total Selling and Administrative Expenses Net Profit -145250 00 256,500.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash S 34.710.00 67,500.00 Inventory Raw Material Figurines 500 @ $9.20 500@ $1.25 4,600.00 625.00 Electrical Sets Work in Process Finished Goods 3000 $28.93 86,790.00 $ 194,225.00 Total Current Assets Fixed Assets $ 20,000.00 6,800.00 Acc Total Fixed Assets 13,200.00 $ 207,425.00 Total Assets Current Liabilities Accounts Payable Total Liabilities $ 54,000.00 $ 54,000.00 Equity 12,000.00 141,425.00 Common Stock Retained Eanings Total Stockholder's Equity Total Liabilities and Stockholder's Equity 153,425.00 207.42500 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 based on the following assumptions. Note: Remember, that we cannot sell up to the number of units and then multiply by the selling price per unit. analysis part of a lamp, therefore to find the number of units you have to round next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the 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? Contribution Margin per unit (Round to seven places. S## #######) Contribution Margin Ratio (Round to seven places,% is two of those places ## ###%) For 20x2 the selling price per lamp will be $45.00. How many lamps must be sold to breakeven? (5.01) [ (6.02) 2. Breakeven sales in units (Round up to zero places, ###,### units) (5.03) For 20x2 the selling price per lamp will be $45.00. The desired net income in 20x2 is $264,000. What would sales in units have to be in 20x2 to reach the proft goal? 3. (5.04) Sales in units (Round up to zero places, #### units) brittany ciot 8895 4. For 20x2 the selling price per lamp will be $45.00. The company would like to have a net income equal to 29.00% of sales. If that is to be achieved, what would be the sales in units in 20x27 Sales in units (Round up to zero places, ###,### units) 6.01) 5. If the company believed that it could only sell 25,000 lamps, what would the new selling price have to be New Selling Price (Round up to two places. S###### ## ) (6.02 For 20x2 the selling price per lamp will be $45.00. a net income of $260,000? 6. How many units must be sold to generated 6.03) in units (Round up to zero places. ###### units) If the company per lamp, believes that the demand will be 27,500 units for the year. What selling price ces, would generate a net income of $823,5002 7. rounded to two 6.04) New selling price per lamp (Round up to two places. S###,### ## )