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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

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:
Expected increases for 202
When calculating projected increases round to TWO ($0.00) decimal places.
Material Costs are expected to increase by 3.00%.
Labor Costs are expected to increase by 4.00%.
Variable Overhead is expected to increase by 4.00%.
Fixed Overhead is expected to increase to $285,000.
Fixed Administrative expenses are expected to increase to $60,000.
Variable selling expenses (measured on a per lamp basis) are expected to increase
by 3.00%.
Fixed selling expenses are expected to be $31,000 in 202.
Variable administrative expenses (measured a per lamp basis) are expected to
increase by 2.00%.
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.
PART 2
Cost Volume Relationships -
Profit Planning
Big Al is about to begin work on the budget for 202 and they have requested that you prepare an analysis
based on the following assumptions.
Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round
up to the next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the
number of units and then multiply by the selling price per unit
For 202 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution
{5.01}
Contribution Margin Ratio (Round to four places, % is two of those places ##.##%)
{5.02}
For 202 the selling price per lamp will be $45.00. The desired net income in 202 is $205,000. What
would sales in units have to be in 202 to reach the profit goal?
{5.03}
For 202 the selling price per lamp will be $45.00. If the fixed cost increase by $40,000.00 how many lamps
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