Problem 1 (45 pts.): Andarex Corporation has two divisions: the Gadget Division and Gizmo Division. Revenue and cost information relating to the products is as follows: Gadget Dix Gizmo Dive Units Sold 60,000 50,000 Selling Price per unit $ 18.00 $ 17.00 Variable Product Costs per unit $ 8.00 $ 8.00 Variable Selling Costs per unit $ 3.000 $ 2.50 Total Traceable Fixed Costs $ 35,000$ 90,000 Common fixed costs for Andarex are made up of $105,000 in headquarters rent, $25,000 in insurance and $170,000 in other administrative expenses. Required: Prepare a contribution format income statement segmented by division:- Total Gadget Diva Gizmo Dive e e Sales Variable Costs Contribution Margin- Traceable Fixed Costs Segment Margin Common Fixed Costs Net Operating Income What is the company's overall break-even in sales dollars (fixed costs divided by CM%)? (10 pts.) 2 2 t If Andarex spent $70,000 on Gizmo Division advertising to increase total sales in the Gizmo Division by 40%, how much would that change segment margin for the Gizmo Division? (Show your work and indicate INCREASE or DECREASE.) (10 pts.) Problem 2 (60 pts.): The marketing department of Groovy Sue Backpacks has the following sales budget for the months of April through July: tt Aprile Maye June July Budgeted Cash Sales $ 39,000 $ 32,000 $ 34,000 $ 39,000 Budgeted Credit Sales 351,000 288,000 306,000 351,000 Budgeted Total Sales $ 390,000 $ 320,000- $ 340,000 $390,000 Management expects to collect 65% of credit sales in the month in which the credit sales are made and 35% in the following month. The balance of accounts receivable as of March 31st, all of which is expected to be collected in April, is $119,700. . Budgeted cost of goods sold is estimated to be 60% of total sales. Groovy Sue management wants ending inventory to be equal to 20% of the following month's budgeted cost of good sold. On March 31st, ending inventory was $46,800. Required: 1. Using the template provided, calculate the expected cash collections for each month for April through June. (30 pts.) Groovy Sue Backpacks Schedule of Cash Collections April Maye June tttttttttttt1 e Collections from: Cash Sales Credit Sales: Accounts receivable, Mar 31st April credit sales May credit sales June credit sales Total collections e e tt 2. In the space provided below, prepare the merchandise inventory purchases budget for April through June. (30 pts.) Groovy Sue Backpacks Merchandise Purchases Budget April Maya June Problem 3 (45 pts.): Flanagan's Place is a restaurant located in Beacon Hill. Flanagan's budget for November was based on 5,300 meals which are budgeted at $15 each. Flanagan's manager has provided the following cost data to use in the budget: Fixed Component Variable Component Expense Category Per Month Per Meal Groceries $5.052 Kitchen Operations $5,9002 $1.652 Administrative Expense $3,700 $0.30 Rent Expense $4,200 The manager has also provided the diner's statement of actual results for the month: Flanagan's Place Statement of Actual Results for the Month Ended November 304 Actual meals 5,7004 Total revenuese $ 83,450 Groceries $ 29,790 Kitchen operations $ 13,310 Administrative expenses $ 5,6854 Rent expense $ 3.9204 Total expenses $ 52,7054 Net Operating Income $ 30,7454 Required: Prepare a flexible budget performance report showing both the activity variances and the revenue and spending variances for November. Label each variance as favorable (F) or unfavorable (U). Flanagan's Place Flexible Budget Performance Report For the Month Ended November 30 Revenue & Fee Actual Spending Flexible Results Variances U?d Budget Fele or Activity or Variances U? Planning Budgete le tt Net Operating Income