Please assist in working out this problem. I have attached thespreadsheet. It is Tab P5-2A. I need the entire spreadsheet completed. It will not allow me to add additional questions.

Instructions

(a)

Prepare a CVP income statement for 2017 based on management estimates. (show column for total amounts only.)

(b)

Compute the break-even point in (1) units and (2) dollars.

(c )

Compute the contribution margin ratio and the margin of safety ratio. (Round to the nearest full percent.)

(d)

Determine the sales dollars required to earn net income of $180,000.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(b)	Compute the break-even point in (1) units and (2) dollars.

P5-2A Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio and sales for target net income Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2017, management estimates the following revenues and costs. Sales $1,800,000 Selling expenses - variable $70,000 Direct materials 430,000 Selling expenses - fixed 65,000 Direct labor 360,000 Administrative expenses - variable 20,000 Manufacturing overhead- variable 380,000 Administrative expenses - fixed 60,000 Manufacturing overhead -fixed 280,000 Instructions (a) Prepare a CVP income statement for 2017 based on management estimates. (show column for total amounts only.) (b) Compute the break-even point in (1) units and (2) dollars. (c ) Compute the contribution margin ratio and the margin of safety ratio. (Round to the nearest full percent.) (d) Determine the sales dollars required to earn net income of $180,000. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) Prepare a CVP income statement for 2017 based on management estimates. (show column for total amounts only.) JORGE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2017 Sales Variable expenses Cost of goods sold Selling expenses Administrative expenses Total variable expenses Contribution margin Fixed expenses Cost of goods sold Selling expenses Administrative expenses Total fixed expenses Net income (b) $1,800,000 $1,170,000 135,000 80,000 1,385,000 415,000 280,000 Value 60,000 ? ? Compute the break-even point in (1) units and (2) dollars. (b)(1) Value Value ? Fixed costs Unit contribution margin Break-even point in units (b)(2) Break-even point in units Unit selling price Unit variable costs Unit contribution margin Value Value ? Break-even point in dollars Break-even point in units Unit selling price Break-even point in dollars Value Value ? (c ) Compute the contribution margin ratio and the margin of safety ratio. (Round to the nearest full percent.) Contribution margin ratio Unit contribution margin Unit selling price Contribution margin ratio Margin of safety ratio Total sales Break-even sales Margin of safety (dollars) Total sales Margin of safety ratio (d) Value Value ? Value Value Value Value Value Determine the sales dollars required to earn net income of $180,000. Sales dollars required to earn target income Fixed costs Value Target income Value Total fixed cost + target income ? Contribution margin ratio ? Sales dollars required ? After you have completed P5-2A, consider the following additional question 1. Assume that the unit selling price per bottle changed to $0.60 each, and fixed manufacturing costs increased to $300,000. Show impact of these changes on calculations. CD5 - EXCEL Tutorial CURRENT DESIGNS Bill Johnson, sales manager, and Diane Buswell, controller at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak. Kevlar Resin and supplies Finishing kit (seat, rudder, ropes, etc.) Labor Selling and administrative expenses - variable Selling and administrative expenses - fixed Manufacturing overhead - fixed $250 per kayak $100 per kayak $170 per kayak $420 per kayak $400 per kayak $119,000 per year $240,000 per year Bill and Diane have asked you to provide a cost-volume-profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,000. Instructions (a) Calculate variable cost per unit. (b) Determine the unit contribution margin. (c ) Using the unit contribution margin, determine the break-even point in units for this product line. (d) Assume that Current Designs plans to earn $270,000 on this product line. Using the unit contribution margin, calculate the number of units that need to be sold to achieve this goal. (e ) Based on the most recent sales forecast, Current Design plans to sell 1,000 units of this model. Using your results from part (c ), calculate the margin of safety and the margin of safety ratio. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) Calculate variable cost per unit. Kevlar Resin and supplies Finishing kit (seat, rudder, ropes, etc.) Labor Selling and administrative expenses - variable Total variable costs per unit Value Value Value Value Value ? (b) Determine the unit contribution margin. Unit selling price Unit variable cost Unit contribution margin Value ? ? (c ) Using the unit contribution margin, determine the break-even point in units for this product line. Selling and administrative expenses - fixed Manufacturing overhead - fixed Total fixed costs (a) Unit contribution margin (b) Break-even points (units) (a b) Value Value ? Value ? (d) Assume that Current Designs plans to earn $270,000 on this product line. Using the unit contribution margin, calculate the number of units that need to be sold to achieve this goal. Total fixed costs Target net income Total fixed costs + target net income (a) Unit contribution margin (b) Units need to be sold (a b) Value Value ? Value ? (e ) Based on the most recent sales forecast, Current Design plans to sell 1,000 units of this model. Using your results from part (c ), calculate the margin of safety and the margin of safety ratio. Margin of safety Actual (expected) sales Break-even sales Margin of safety (dollars) Value Value ? Margin of safety ratio Margin of safety (dollars) (a) Actual (expected) sales (b) Margin of safety ratio (a b) Value Value ? After you have completed CD-5, consider the following additional question 1. Assume that the unit selling price per kayak changed to $2,200 each, and fixed manufacturing overhead increased to $360,000. Show impact of these changes on calculations. E6-3 Compute net income under different alternatives Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $210,000; and fixed costs $75,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10% with no change in total variable costs or sales volume. 2. Reduce variable costs to 58% of sales. 3. Reduce fixed costs by $15,000. Instructions Compute the net income to be earned under each alternative. Which course of action will produce the highest net income? NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . 1. Increase selling price by 10% with no change in total variable costs or sales volume. Current selling price New selling price (Round to nearest cent) ? ? Total sales Less: variable costs Contribution margin Less: fixed costs Net income 2. 3. ? ? ? Value ? Reduce variable costs to 58% of sales. Total Sales Less: variable costs Contribution margin Less: fixed costs Net income Value Value ? Value ? Reduce fixed costs by $15,000. Total Sales Less: variable costs Contribution margin Less: fixed costs Net income Value Value ? Value ? After you have completed E6-3, consider the following additional questions. 1. Assume that unit selling price increased 5% with no change in total variable costs or sales volume. 2. Assume variable costs decreased to 53% of sales. 3. Assume that fixed costs increased by $20,000. Which course of action will produce the highest net income? CD6 EXCEL Tutorial CURRENT DESIGNS Current Designs manufactures two different types of kayak, rotomolded kayaks and composite kayaks. The following information is available for each product line. Sales price/unit Variable costs/unit Rotomolded $950 $570 Composite $2,000 $1,340 The company's fixed costs are $820,000. An analysis of the sales mix identifies that rotomolded kayaks make up 80% of the total units sold. Instructions (a) Determine the weighted-average unit contribution margin for Current Designs. (b) Determine the break-even points in units for Current Designs and identify how many units of each type of kayak will be sold at the break-even point. (Round to the nearest whole number.) (c ) Assume that the sales mix changes, and rotomolded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of $2,000,000 and identify how many units of each type of kayak will be sold at this level of income. (Round to the nearest whole number.) (d) Assume that Current Designs will have sales of $3,000,000 with two-thirds of the sales dollars in rotomolded kayaks and one-third of the sales dollars in composite kayaks. Assuming $660,000 of fixed costs are allocated to the rotomolded kayaks and $160,000 to the composite kayaks, prepare a CVP income statement for each product line. (e ) Using the information in part (d), calculate the degree of operating leverage for each product line and interpret your findings. (Round to two decimal places.) (a) Determine the weighted-average unit contribution margin for Current Designs. Sales price/unit Variable costs/unit Unit Contribution margin (UCM) Product mix Weighted Average UCM Rotomolded Kayaks Value Value ? Value ? + Composite Kayaks Value Value ? Value ? ? (b) Determine the break-even points in units for Current Designs and identify how many units of each type of kayak will be sold at the break-even point. (Round to the nearest whole number.) Fixed costs Weighted Average UCM Breakeven units Breakeven unit distribution Value Value ? Rotomolded Kayaks ? Composite Kayaks ? (c ) Assume that the sales mix changes, and rotomolded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of $2,000,000 and identify how many units of each type of kayak will be sold at this level of income. (Round to the nearest whole number.) Target net income in units: Sales price/unit Variable costs/unit Unit Contribution margin (UCM) Product mix Weighted Average UCM Rotomolded Kayaks Value Value ? Value ? Required sales in units: Total fixed costs Target net income Total required sales (dollars) Weighted Average UCM Required sales in units Value Value ? ? ? + Composite Kayaks Value Value ? Value ? ? Value Value ? ? ? (d) Assume that Current Designs will have sales of $3,000,000 with two-thirds of the sales dollars in rotomolded kayaks and one-third of the sales dollars in composite kayaks. Assuming $660,000 of fixed costs are allocated to the rotomolded kayaks and $160,000 to the composite kayaks, prepare a CVP income statement for each product line. Sales Variable Costs Contribution Margin Fixed Costs Net Income Rotomolded Kayaks Value Value ? Value ? Composite Kayaks Value Value ? Value ? (e ) Using the information in part (d), calculate the degree of operating leverage for each product line and interpret your findings. (Round to two decimal places.) Rotomolded Kayaks Contribution Margin (a) Value Value Net Income (b) Degree of Operating Leverage (a b ? Composite Kayaks Value Value ? Interpretation of findings: After you have completed CD6, consider the following additional question. 1. Assume that variable cost per unit for the rotomolded kayak and composite kayak changed to $610 and $1,400 respectively. Show impact of these changes on each of the scenarios provided. P7-3A Determine if product should be sold or processed further. Thompson Industrial Products Inc. (TIPI) is a diversified industrial-cleaner processing company. The company's Dargar plant produces two products: a table cleaner and a floor cleaner from a common set of chemical inputs (CDG). Each week 900,000 ounces of chemical input are processed at a cost of $210,000 into 600,000 ounces of floor cleaner and 300,000 ounces of table cleaner. The floor cleaner has no market value until it is converted into a polish with the trade name FloorShine. The additional processing costs for this conversion amount to $240,000. FloorShine sells at $20 per 30-ounce bottle. The table cleaner can be sold for $17 per 25-ounce bottle. However, the table cleaner can be converted into two other products by adding 300,000 ounces of another compound (TCP) to the 300,000 ounces of table cleaner. This joint process will yield 300,000 ounces each of table stain remover (TSR) and table polish (TP). The additional processing costs for this process amounts to $100,000. Both table products can be sold for $14 per $25-ounce bottle. The company decided not to process the table cleaner into TSR and TP based on the following analysis. Production in ounces Revenue Costs: CDG costs TCP costs Total costs Weekly gross profit Table Cleaner 300,000 $204,000 70000* 0 70,000 $134,000 Process Further Table Stain Table Remover (TSR) Polish (TP) 300,000 300,000 $168,000 $168,000 52,500 50,000 102,500 $65,500 52,500 50,000 102,500 $65,500 Total $336,000 105,000 ** 100,000 205,000 $131,000 *If table cleaner is not processed further, it is allocated 1/3 of the $210,000 of CDG cost, which is equal to 1/3 of the total physical output. ** If table cleaner is processed further, total physical output is 1,200,000 ounces. TSR and TP combined account for 50% of the total physical output and are each allocated 25% of the CDG cost. Instructions (a) Determine if management made the correct decision to not process the table cleaner further by doing the following. (1) Calculate the company's total weekly gross profit assuming the table cleaner is not processed further. (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further. (3) Compare the resulting net incomes and comment on management's decision. (b) Compare the resulting net incomes and comment on management's decision. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) Determine if management made the correct decision to not process the table cleaner further by doing the following. (1) Calculate the company's total weekly gross profit assuming the table cleaner is not processed further. Table Cleaner Not Processed Further Sales: FloorShine Table cleaner Total Revenue Costs: CDG Additional costs of FloorShine Total costs Gross profit (a) ? ? ? Value Value ? ? Determine if management made the correct decision to not process the table cleaner further by doing the following. (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further. Table Cleaner Processed Further Sales: FloorShine Table Stain Remover Table Polish Total Revenue Costs: CDG Additional costs of FloorShine TCP Total costs Gross profit (a) Value Value Value ? Value Value Value ? ? Determine if management made the correct decision to not process the table cleaner further by doing the following. (3) Compare the resulting net incomes and comment on management's decision. Response: (b) Compare the resulting net incomes and comment on management's decision. Incremental revenue Incremental costs Total Don't Process Table Cleaner Further Value Value ? Process Table Cleaner Further Value Value ? Net Income Increase (Decrease) Value Value ? Response: 1. After you have completed P7-3A, consider the following additional question. Assume that the selling price of the two table products after further processing changed to $13 for each 25-ounce bottle and the cost of TCP compound to further process changed to $120,000. How do these changes impact the decision to process or not process further? CD7 EXCEL Tutorial CURRENT DESIGNS Current Designs faces a number of important decisions that require incremental analysis. Consider each of the following situations independently. Situation 1 Recently, Mike Cichanowski, owner and CEO of Current Designs, received a phone call from the president of a brewing company. He was calling to inquire about the possibility of Current Designs producing "floating coolers" for a promotion his company was planning. These coolers resemble a kayak but are about one-third the size. They are used to float food and beverages while paddling down the river on a weekend leisure trip. The company would be interest in purchasing 100 coolers for the upcoming summer. It is willing to pay $250 per cooler. The brewing company would pick up the coolers upon completion of the order. Mike met with Diane Buswell, controller, to identify how much it would cost Current Designs to produce the coolers. After careful analysis, the following costs were identified. Direct materials Direct labor $80/unit $60/unit Variable overhead Fixed overhead $20/unit $1,000 Current Designs would be able to modify an existing mold to produce the coolers. The cost of these modifications would be approximately $2,000. Instructions (a) Prepare an incremental analysis to determine whether Current Designs should accept this special order to produce the coolers. (b) Discuss additonal factors that Mike and Diane should consider if Current Designs is currently operating at full capacity. Situation 2 Current Designs is always working to identify ways to increase efficiency while becoming more environmentally conscious. During a recent brainstorming session, one employee suggested to Diane Buswell, controller, that the company should consider replacing the current rotomold oven as a way to realize savings from reduced energy consumption. The oven operates on natural gas, using 17,000 therms of natural gas for an entire year. A new, energy-efficient rotomold oven would operate on 15,000 therms of natural gas for an entire year. After seeking out price quotes from a few suppliers, Diane determined that it would cost approximately $250,000 to purchase a new, energy-efficient rotomold oven. She determines that the expected useful life of the new oven would be 10 years, and it would have no salvage value at the end of its useful life. Current Designs would be able to sell the current oven for $10,000 Instructions (a) Prepare an incremental analysis to determine if Current Designs should purchase the new rotomold oven, assuming that the average price for natural gas over the next 10 years will be $0.65 per therm. (b) Diane is concerned that natural gas prices might increase at a faster rate over the next 10 years. If the company projects that the average natural gas price of the next 10 years could be as high as $0.85 per therm, discuss how that might change your conclusion in (a). Situation 3 One of Current Designs' competitive advantages is found in the ingenuity of its owners and CEO, Mike Cichanowski. His involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the most important component of a kayak, the seat. The "Revolution Seating System" is one-of-a-kind, rotating axis seat that gives unmatched, full contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a customizable seat position that maximizes comfort for the rider. Having just designed the "Revolution Seating System", Current Designs must now decide whether to produce the seats internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows. Direct materials Variable overhead $20/unit $12/unit Direct labor Fixed overhead $15/unit $20,000 Current Designs will need to produce 3,000 seats this year; 25% of the fixed overhead will be avoided if the seats are purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will cost $50 to purchase a seat from an outside vendor. Instructions (a) Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System." (b) Would your answer in (a) change if the productive capacity released by not making the seats could be used to produce income of $20,000? NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . Situation 1 (a) Prepare an incremental analysis to determine whether Current Designs should accept this special order to produce the coolers. Net Income Reject Order Accept Order Increase (Decrease) Revenues Value ? Value Costs Net income Value ? Value ? ? ? Response: (b) Discuss additonal factors that Mike and Diane should consider if Current Designs is currently operating at full capacity. Response: Situation 2 (a) Prepare an incremental analysis to determine if Current Designs should purchase the new rotomold oven, assuming that the average price for natural gas over the next 10 years will be $0.65 per therm. Variable mfg. costs New oven costs Proceed from scrapping old oven Total Retain Oven ? Value Replace Oven ? Value Net Income Increase (Decrease) ? ? Value Value ? ? ? ? Response: (b) Diane is concerned that natural gas prices might increase at a faster rate over the next 10 years. If the company projects that the average natural gas price of the next 10 years could be as high as $0.85 per therm, discuss how that might change your conclusion in (a). Variable mfg. costs New oven costs Proceed from scrapping old oven Total Retain Oven ? Replace Oven ? Net Income Increase (Decrease) ? Value Value ? Value Value ? ? ? ? Response: Situation 3 (a) Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System." Net Income Make ? Buy Value (Decrease) Value Direct labor ? Value Value Variable mfg. costs ? Value Value Fixed mfg. costs Value ? ? Purchase price Value ? ? ? ? ? Direct materials Total annual cost Response: (b) Would your answer in (a) change if the productive capacity released by not making the seats could be used to produce income of $20,000? Total annual cost Make Value Buy Value Net Income Increase (Decrease) Value Opportunity cost Value Value Value ? ? ? Total cost Response: After you have completed CD7, consider the following additional questions. 1. Assume in situation 1, the unit selling price changed to $195, fixed overhead changed to $1,800 and the cost of modifications changed to $3,000. Show the impact of these changes on decision to accept or reject the special order. 2. Assume in situation 2, the purchase price of the new oven changed to $100,000. Would this change the decision to retain or replace the oven? 3. Assume in situation 3, that the estimated number of seats to be produced changed to 3,500 and the cost to purchase one seat from an outside supplier changed to $55. Should Current Designs make or buy the seats