Read theFashion Designs International, Inc.[PDF] case study and complete the following requirements.

Quantitative Analysis:

Based on the information presented in Tables 1 and 2, calculate the following:

1. Calculate Total Variable Costs.
2. Calculate Total Fixed Costs
3. Calculate Contribution Margin per Unit
4. Calculate Break-Even, Unit Sales
5. Calculate Target Profit
   

Table 1 Fashion Designs International, Inc. Fashion Designs International, Inc. Comparative Income Statements year ended December 31, 2014 2016 Global Assumptions: 2016 Sales $1,987,050 2015 $2,124,885 $2,249,830 units sold 36,200 Cost of Goods Sold: units produced 36.200 Fabric 237,250 250.390 264.260 $62.15 201.500 212,660 224.440 avg sales price Cutting income tax rate 30% Sewing 260.000 274.400 289.600 Brand labels 3.900 4.116 4.344 benefits - salary 18.0% Thread etc. 650 686 724 benefits - wages 12.0% Shipping and freight 29,250 32,580 Desired Cash Payout Total Cost of Goods Sold 732.550 773,122 815,948 Gross Profit 1.254.500 1,351,763 1,433,882 (a) - Calculate Total Variable Costs Operating Expenses: Bank charges 1.260 1,260 1,320 Salary expense $50,000 360,000 370,500 Wage expense 263.250 291,722 323,275 Employee benefits - salaried employees 63,000 64,800 66,690 Employee benefits - hourly employees 31,590 35.007 38,793 Insurance 22.450 22,450 23,124 Information Technology services 8,220 8.340 8.520 Legal fees 15.000 18.840 20.280 Licenses and permits 5.400 5.400 5.400 Meals and entertainment 14,304 15.019 15.925 Total variable costs Printing and reproduction 1,452 1,740 1.860 Professional Fee 15,504 16,260 16.920 Marketing and promotion 30.996 34,104 30,996 Rent - Office 36,996 36,996 37,380 (b) - Calculate Total Fixed Costs Rent - Warehouse 41.004 12,234 42,234 Repairs and maintenance 8.592 7,380 10.188 Security expense 2,100 2,100 2,184 Office supplies 2,136 2,532 2,844 Telephone and internet 2,472 2,604 2 808 Vehicle expenses 5,760 5,875 6,051 Travel expenses 21,000 21,210 21,846 Utilities 1.956 2,034 2,156 Total operating expenses 944.442 97,907 .051,295 Profit before taxes 310,058 353,856 382,587 Income taxe 93.01 106,157 Profit after taxes $217,041 $247,699 114,776 $267,811 Table 2 Fashion Designs International, Inc. Assumptions for Income and Expense Projections 2016 Expense Item F/ (la) Formula amount (1b) Cost of Goods Sold $7.30000 Total fixed costs Fabric (2) units sold (6) x VC per unit Cutting (2) V V $6.20000 Sewing (3) V units sold (6) x VC per unit V units sold (6) x VC per unit $8.00000 Brand labels (4) units sold (6) x VC per unit $0.12000 (c) - Calculate Contribution Margin per Unit Thread etc. (1) V Sales price per unit V units sold (6) x VC per unit $0.02000 Shipping and freight (5) units sold (6) x VC per unit $0.90000 Variable costs per unit (a) Contribu margin per unit Operating Expenses: Bank charges fixed monthly cost x 12 $1,320 (d) - Calculate Break-Even, Unit Sales Sal exp - owner fixed annual cost x 1 $150,000 Fixed costs (b) Sal exp - employees fixed annual cost x 1 $220,500 + CM/U Wage expense units produced x VC per unit $8.93025 Unit sales, BEP Emp benis - sal F V salary expense x percentage $66,690 Emp benis - hrly wage expense x percentage $1.07163 (e) - Calculate Target Profit Insurance F fixed annual cost x 1 $23,124 Desired cash payout to owner (from IT services fixed monthly cost x 12 $8,520 scenario) Legal fees fixed monthly cost x 12 $20,280 Subtract owner salary Lic & Permits fixed monthly cost x 12 $5,400 Target profit after taxes Meals and entertainment fixed monthly cost x 12 $15,925 + 100% less income tax rate Printing and reproduction fixed monthly cost x 12 $1,860 Target profit before taxes Professional Fees fixed monthly cost x 12 $16,920 Fixed costs Marketing and promotion fixed monthly cost x 12 $30,996 FC + target profit Rent - Office fixed monthly cost x 12 $37,380 = CM/U Rent - Warehouse fixed monthly cost x 12 $42,234 Unit sales, target profit Repairs and maintenance fixed monthly cost x 12 $10,188 Security expense fixed monthly cost x 12 $2,184 Office supplies fixed monthly cost x 12 $2,844 Telephone and internet fixed monthly cost x 12 $2,808 Vehicle expenses fixed monthly cost x 12 $6,051 Travel expenses fixed quarterly cost x 4 $21,846 Utilities fixed monthly cost x 12 $2,156 la F = fixed cost; V = variable cost; Ib for variable (1): amount per unit; for fixed (F): annual amount 2 cost paid on per yard basis cost paid on per piece basis cost paid on per label basis. cost paid on weight and volume basis 6 units sold and units produced both projected to grow at annual rate of 0%%