please answer 5.01 - 5.04. (use 4.01 - 4.15 if needed)
B B D E F G H Profit Planning Big Al is about to begin work on the budget for 20x2 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 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? 1. 45 per lamp Contribution Margin per unit (Round to seven places, $18.88888) (5.01) Contribution Margin Ratio (Round to seven places, % is two of those places ######%) (5.02) 2 For 20x2 the selling price per lamp will be $45.00. How many lamps must be sold to breakeven? 1 D 1 2 3 6 7 8 9 O Breakeven sales in units (Round up to zero places, #*##*# units) {5.03) B D E F G H I 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 operating income in 20x2 is $271,750 What would sales in units have to be in 20x2 to reach the profit goal? 44 45 46 49 50 51 52 53 56 57 58 59 60 63 3 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 A7 Sales in units (Round up to zero places, www units) (5.04) 8 9 Variable Manufacturing Unit Cost 20x 1 Cost 20x2 Cost Rounded to 7 Decimal Places 9.2 1.25 6 Projected Percent Increase 3% 3% 3% 3% 4% $9.4760000 $1.2875000 $6.1800000 $2.3175000 $0.2328750 (4.01) (4.02) {4.03) {4.04) (4.05) 2.25 0.225 10 11 Figurines 12 Electrical Sets 13 Lamp Shade 15 Labor 16 Variable Overhead 17 18 Projected Variable Manufacturing Cost Per Unit 19 21 22 23 Total Variable. Cost Per Unit 18.925 $19.4938750 {4.06) 20x 1 Cost Projected Percent Increase 3.50% 20x2 Cost Rounded to 7 Decimal Places 3.2602500 (4.07) 3.15 0.0500000 (4.08) 3.3102500 (4.09) 24 25 Variable Selling 27 Variable Administrative 20x1 28 Variable Administrative 20x2 29 30 Projected Variable Manufacturing Unit Cost 31 Projected Total Variable Cost Per Unit 33 34 35 36 Schedule of Fixed Coats 18.925 22.135 $19.49 (4.06) 26.0643750 (410) 20x 1 Cost Projected Increaso 4% 20x2 Cost Rounded to 2 Decimal Places $ 269,100.00 (411) 260,000 25000 lamps 10.4 lamps @_) $ 39,000.00 37 39 Fixed Overhead 40 (normal capacity of 41 Fixed Selling 42 Fixed Administrative 20x1 43 Fixed Administrative 20x2 45 Projected Total Fixed costs 46 39,500.00 (4.12) (4.13) (414) (4.15) $ $ 41.500.00 349,600.00 19 8 The projected cost of a lamp is calculated based upon the projected increases or decreasils to 9 current costs. The present costs to manufacture one lamp are: 10 11 Figurines $9.2000000 per lamp 12 Electrical Sets 1.2500000 per lamp Lamp Shade 6.0000000 per lamp 20 Direct Labor. 2.2500000 per lamp (4 lamps/hr.) 21 Variable Overhead: 0.2250000 per lamp 22 Fixed Overhead: 10.0000000 per lamp (based on normal capacity of 25,000 lamps) 23 30 Cost per lamp: $28.9250000 per lamp 31 32 Expected increases for 20x2 33 When calculating projected increases round to SEVEN decimal places 50.0000000 34 41 1. Material Costs are expected to increase by 3.00% 42 43 2. Labor Costs are expected to increase by 3.00%. 44 45 3. Variable Overhead is expected to increase by 3.50%. 52 53 4. Fixed Overhead is expected to increase to $260,000 54 55 5. Fixed selling expenses are expected to be $39,000 in 20x2. 56 63 6. Variable selling expenses (measured on a per lamp basis) are expected to increas 64 by 3.50%. 65 66 7. Fixed Administrative expenses are expected to increase by $2,000. 67 The total administrative expenses for 20x0 were $40,625.00, when 74 22,500 units were sold. Use the High-Low method to calculate 75 the total fixed administrative expense. 76 77 8. Variable administrative expenses (measured on a per lamp basis) are expected to 78 increase by 5.00%. The total administrative expenses for 20x0 were 85 $40,625.00, when 22,500 units were sold. Use the High-Low method to calculate 86 the variable administrative expense per lamp. 88 On the following schedule develop the following figures: 89 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 96 97 2- 20x2 Projected Variable Unit Cost per lamp 87
