Please review and fill out the documents below

CVP Modeling project Directions The purpose of this project is to give you experience creating a multiproduct profitability analysis You have been hired by Jake to build a CVP model that will help him understand the impact of business conditions on his operating that can be used to determine the effects of changing business conditions on the client's financial income. In your model, all of the original assumptions will be hardcoded one area of the spreadsheet (blue box). All other calculations position. Your goal will be to use Excel in such a way that any changes to the assumptions will in the model will reference the assumptions (blue box) such that if any assumption changes, the effect will ripple through the entire correctly ripple through the entire profitability analysis. If executed properly, the client should be model. To accomplish this goal, you will use FORMULAs, rather than numbers, in every other cell in the worksheet. In other words, able to use this spreadsheet over and over, using different "what if" assumptions. the only place you will type numbers is the blue assumptions box. FIRST TASK: Rename your excel file: LastName_FirstName Business Description FORMATTING conventions to use throughout project; After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at Round all UNITS to the nearest whole unit. Use the "decrease decimals" button on your tool bar rather than the Rounding function. trade shows. He has two products: Show all MONETARY amounts as dollars and cents. Round to the nearest cent. ($x.xx). Use the "decrease decimals" button rather than the rounding function. Product 1: "Launch-it"- a tennis ball thrower that will sell for $10. Show all percentages as %, not as decimals. (x%, not .xx) Right justify all cells (numbers should be to the right side of the cell, not in the middle or left) Product 2: "Treat-time"- an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $30. 1) Complete the assumptions (blue box) based on the data about Jake's business. Identify and list all variable costs separately and all Costs: Jake has hired an employee to work the trade show booths. The work contract is $1,000 fixed costs separately before finding the total for each type of cost. per month plus a commission equal to 15% of revenue. Jake will also spend $500 per month on trade-show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-its cost 2) Complete the Product Analysis (yellow boxes) assuming Jake ONLY sells either Product #1 (Launch-its) OR Product #2 (Treat - $1 each; Treat-times cost $7 each. Shipping and handling on the Launch-its will cost $3 each times ) . Shipping and handling on the Treat-times, which are heavier, will cost $11 each. The shipping and handling costs will be paid by Jake, not the customer. Check figures: B/E Product #1 = 333 units; B/E Product #2= 200 units Assume Jake expects to sell 1,000 Launch-its and 750 Treat-times during his first month of 3) Complete the pro forma CM Income Statement for the month of June (green box). HINT: On product line income statements such operations (June). as this, the fixed costs are only listed in the total column. Make sure you also show the totals for all other line items. Finally, calculate the overall WACM% for the company. Jake's financial goal is to earn an operating income of $8,000 per month. He believes volume may grow at a rate of 5% a month. Check figure: Operating income = $8,625 WACM% = 31% ulate the weighted average contribution margin (WACM) per unit (in orange box). Check figure: WACM/unit = $5.79 5) Use the WACM/unit to calculate the TOTAL number of units needed to breakeven (TOTAL column in the first gray box). THEN, calculate the number of EACH type of product needed to breakeven. Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in total. Check figures: B/E Product #1 = 148; B/E Product #2= 111 6) Use the WACM/unit to calculate the total number of units needed to achieve Jake's target profit (TOTAL column in the second gray uthor & Creator of Project : Karen Braun, Professor at Case Western box). THEN, calculate the number of EACH type of product needed to achieve the target profit. Finally, calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total. Check figures: B/E Product #1 =938; B/E Product #2= 704 7) Calculate the MOS using June sales as the expected sales (purple box). Calculate the MOS in terms of sales revenue and as a percentage. Also calculate the current profit multiplier(profit sensitivity -round to the nearest 2 decimal places) and use it to determine the expected percentage change in operating income stemming from an expected change in sales volume. Check figures: MOS%= 85%; Profit multiplier= 1.17 8) Change name of worksheet to "Original Assumptions". 9) Make sure you have cleaned up your worksheet using the formatting conventions listed above. 10) Go to the "Advising client" worksheet and follow the directions found there. 11) Check to make sure you have done everything on the grading rubric. Submit your excel file to the appropriate drop box on ICON. Make sure you have named your file correctly(LastName_FirstName).ASSUMPTIONS Product #1 Launch-it Jake's Pet Supplies Product #1: Launch-it Unit CM Pro Forma Contribution Margin Income Statement Sales price per unit $10 CM% For the month ending June 30 Variable costs per unit: Breakeven point: COGS $1 -in unit Product #1 Product #2 Total Shipping and Handling $2 -in sales revenue Sales Commissions $1 Variable Expense Total variable cost per unit Target profit volume: Contribution Margin -in units Fixed Expenses Monthly volume -in sales revenue NO Product #2: Treat-time WACM% Sales price per unit Product #2 Treat-time Unit CM Variable costs per unit: CM% COGS Shipping and handling Breakeven point: Calculation of Weighted average CM per unit Commission -in units Product #1 Product #2 Total Total variable cost per unit -in sales revenue Contribtuion margin per unit Sales Mix Monthly volume Target profit volume: Contribution Margin -in units Fixed costs per month: -in sales revenue WACM/unit Salaries Entry Fees Total fixed costs per month Multiproduct Breakeven point: Product #1 Product #2 Total Target profit per month -in units Sales revenue at breakeven Expected change in volume (%) Multiproduct Target profit point: Product #1 Product #2 Total -in units Sales revenue at target profit Margin of Safety (in $) of Safety % Profit Sensitivity Multiplier Expected % change in operating income (%)EXCEL HINT: To copy an entire worksheet. right click on the worksheet tab at the bottom of the screen and choose "Move or Copy". Then check the "create a copy" box. Once you have the copy, choose "rename". Once you have built the model, use it to answer lake's questions about his business. Treat each situation as a separate scenario. All comparisons should be made to the orUnal assumptions. 1. Save a copy of your original model to a new spreadsheet called "supplier cost decrea . Say the supplier is expected to decrease the cost of the products by 20%. What is the new operating Income? What Is the new WACM%? What Is the new M0599 Erlefw explain your findings to the client 1. Save a copy of your original model to a new spreadsheet called "new sales mix". Say the monthly sales volume is now expected to be 900 "Treat-times" and 350 "launch-its" (same total units, but a different sales mix). What is the new operating income? What is me new WACM/unit ? Given this sales mix, how many units (in total) will Jake need to sell to earn his target prot? Briey explain your ndings to the client. 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $3,000 per month plus 10% of revenue. Given his original sales volume and m' , how would this contract have changed Jake's operating income? What is the new prot multiplier? What is the new expected percentage change In operating Income If volume Increases as expected In the future? Briey explain your findings to the client. EXCEL HINT: To copy a then press enter. / cell from a different worksheet, put a + in the cell where you want the numberto go, and then go back to the original worksheet, put your cursor on the cell, and m M m Operating income Brief explanation: WACM percentage M0596 Operating income Brief explanation: WACM/unlt Units to earn target prot Operating Income Prot sensitivity multiplier Expected 96 changein op inc