Please Help with Income Statement Homework by OCT 28
BLYTHE INDUSTRIES INC. Estimated Income Statement For the Year Ended December 31, 2012 Sales Auto Save on HS 2 21-6A_24e - Compatibility Mode - Excel O Search File Home Insert Page Layout Formulas Data Review View Help Share Comments Insert LI X C Arial ~ A A 10 29 ab Wrap Text 27 SSR Delete Paste B BU A === Merge & Center $ % 8-98 Format Conditional Format as Cel Formatting Table Styles Styles Sort & Find & Filter Select Analyze Data Clipboard Font Alignment Number Cells Editing Analysis 024 - A A B H 1 J L L M N o S T U 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 fx D D E F Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Expenses Selling expenses Sales salaries and commissions Advertising Travel Miscellaneous selling expense Total selling expenses Administrative expenses: Office and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Income from operations Pr. 21-6A Ready al 100% Type here to search O a 53F Mostly cloudy 9:50 PM 10/27/2021 2. Contribution margin ratio: Sales Units x Unit Variable Cost Variable costs Contribution margin Sales Contribution margin ratio 3. Break-even sales: Fixed costs Sale Price Unit Variable Cost : Unit contribution margin Break-even sales (units) Sale price Break-even sales (dollars) X 4. For each unit level of sales, enter the total sales dollars and total costs. The chart at right will be plotted as you enter the amounts. After all points are plotted, grab and move the labels provided at the left to identify each area. Sales $ Costs $ Cost-Volume- Units 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Cost-Volume-Profit Chart $1 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 $1 $1 $1 Sales and Costs Sales $ Operating Loss Area Break-Even Point Costs $ $0 $0 Operating Profit Area 0 $- 9,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Units 5. Units Margin of safety: Sale Price Expected sales Break-even point Margin of safety (in dollars) Expected sales Margin of safety (as a percentage of sales) 6. Operating leverage: Unit CM $ Units Contribution margin Income from operations Operating leverage : PR 21-6A Contribution margin, break-even sales, cost-volume-profit chart, margin safety, and operating leverage Blythe Industries Inc. expects to maintain the same inventories at the end of 2012 as at the beginning of the year. The total of all production costs for the year is therefore as sumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during 2012. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials. $30 Direct labor 20 Factory overhead. $340,000 11 Selling expenses: Sales salaries and commissions...... 80,000 5 Advertising..... 32,000 Travel.... 8,000 Miscellaneous selling expense. 7,600 5 Administrative expenses: Office and officers' salaries 120,000 Supplies.... 8,000 Miscellaneous administrative expense 4,400 2 Total .... $600,000 $75 ul lui I It is expected that 8,000 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 9,000 units. Instructions 1. Prepare an estimated income statement for 2012. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? 6. Determine the operating leverage. BLYTHE INDUSTRIES INC. Estimated Income Statement For the Year Ended December 31, 2012 Sales Auto Save on HS 2 21-6A_24e - Compatibility Mode - Excel O Search File Home Insert Page Layout Formulas Data Review View Help Share Comments Insert LI X C Arial ~ A A 10 29 ab Wrap Text 27 SSR Delete Paste B BU A === Merge & Center $ % 8-98 Format Conditional Format as Cel Formatting Table Styles Styles Sort & Find & Filter Select Analyze Data Clipboard Font Alignment Number Cells Editing Analysis 024 - A A B H 1 J L L M N o S T U 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 fx D D E F Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Expenses Selling expenses Sales salaries and commissions Advertising Travel Miscellaneous selling expense Total selling expenses Administrative expenses: Office and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Income from operations Pr. 21-6A Ready al 100% Type here to search O a 53F Mostly cloudy 9:50 PM 10/27/2021 2. Contribution margin ratio: Sales Units x Unit Variable Cost Variable costs Contribution margin Sales Contribution margin ratio 3. Break-even sales: Fixed costs Sale Price Unit Variable Cost : Unit contribution margin Break-even sales (units) Sale price Break-even sales (dollars) X 4. For each unit level of sales, enter the total sales dollars and total costs. The chart at right will be plotted as you enter the amounts. After all points are plotted, grab and move the labels provided at the left to identify each area. Sales $ Costs $ Cost-Volume- Units 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Cost-Volume-Profit Chart $1 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 $1 $1 $1 Sales and Costs Sales $ Operating Loss Area Break-Even Point Costs $ $0 $0 Operating Profit Area 0 $- 9,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Units 5. Units Margin of safety: Sale Price Expected sales Break-even point Margin of safety (in dollars) Expected sales Margin of safety (as a percentage of sales) 6. Operating leverage: Unit CM $ Units Contribution margin Income from operations Operating leverage : PR 21-6A Contribution margin, break-even sales, cost-volume-profit chart, margin safety, and operating leverage Blythe Industries Inc. expects to maintain the same inventories at the end of 2012 as at the beginning of the year. The total of all production costs for the year is therefore as sumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during 2012. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials. $30 Direct labor 20 Factory overhead. $340,000 11 Selling expenses: Sales salaries and commissions...... 80,000 5 Advertising..... 32,000 Travel.... 8,000 Miscellaneous selling expense. 7,600 5 Administrative expenses: Office and officers' salaries 120,000 Supplies.... 8,000 Miscellaneous administrative expense 4,400 2 Total .... $600,000 $75 ul lui I It is expected that 8,000 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 9,000 units. Instructions 1. Prepare an estimated income statement for 2012. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? 6. Determine the operating leverage
