question 6 & 7 please
4) Shipping costs for the last 3 years have been as follows: Year 1: $126,000 Year 2: $115,000 Year 3: $131,500 Using historical data for future decisions: Assume the information for Years 1, 2 and 3 from CONNECT now represent historical experience. Haas Company can use this information to consider operational changes for Year 4. For Year 4 assume Haas Company will produce and sell the same number of units as they sold in Year 3 from your CONNECT problem (given data). Remember when a company sells the same number of units they produce, product costs equal product expenses and there will be no change to inventory values. 5) Use the variable costing information (given and results) from CONNECT to provide the information required below. Express Net Operating Income in a formula like that used on page 196 of your text. Profit = (unit CM XQ) - Fixed Expenses. Remember to SHOW YOUR WORK!!! a) Sales price per unit b) Variable Expense per unit 21+13+4+2 $40 (include S&A!!) c) Contribution margin per unit d) Contribution margin percent/ratio e) Contribution margin in dollars f) Profit formula NOI = Profit = ; where the first blank is the CM per unit and the second blank is Fixed Expenses Note: Check figures must be supported to earn credit for grading purposes. 6) Complete the table below assuming the indicated number of units were produced and sold. Remember to include S&A variable expenses in your variable expenses. Sales Revenue Variable Expenses Fixed Expenses Total Expenses Profit/NOI Units produced/sold 0 20,000 40,000 60,000 80,000 7) Review pages 223 and 224 from the textbook. Prepare a Cost-VolumeProfit graph for Haas Company. a) Use the graph attached; label both the x and y axis using appropriate increments. Dollar values should be used for the y axis and number of units for the x axis. b) Plot the Fixed Expense line. Label it. c) Plot the Sales Revenue line and label it. d) Plot the Total Expense line and label it. e) Indicate the Break-even Point on the graph and label it. f) Shade and label the portion of the graph that indicates the company's positive profit. Base Year calculations: In order for Haas Company to consider any alternatives, they must first understand their current or "base" position. Break-even, Margin of Safety and Degree of Operating Leverage are 3 criteria that can indicate the company's current situation. Use Haas's anticipated Year 4 information for these "base year" calculations. 8) Margin of Safety evaluates the company's position compared to break-even. Use the information from 6) above and your CONNECT problem to summarize the information in the table below. Calculate the Margin of Safety in (a) dollars (b) units and (c) percent for Year 4. Remember, Haas Company produces and sells the same number of units in Year 4 that they SOLD in year 3. Break-even Base Year 4 Units Sales Revenue NOI a) MoS dollars b) MoS units c) MoS % Note: Check figures must be supported to earn credit for grading purposes. Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 21 13 4 N $ 330,000 $ 150,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company's product is $52 per unit
