REQUIREMENT 01: With the information provided in your problem, complete the chart below. After completing all calculations scroll down to complete Requirements 12 and 43, odditional instructions are provided below. 1 2 3 Estimated Variable Costs Estimated CURRENT ESTIMATES 4 per unit VC Total VC Fixed Costs 5 PRODUCTION COSTS 6 Direct Materials @ $50/unit $50 $600,000 7 Direct Labor @ $30/unit 30 360,000 8 Factory Overhead $350,000 9 SELLING EXPENSES 10 Sales salaries/commissions @ $4/unit + fixed salaries 4 48,000 340,000 11 Travel 4,000 12 Advertising 116,000 13 Miscellaneous selling expenses @ $1/unit 1 12,000 2,300 14 ADMINISTRATIVE EXPENSES 15 Management and office staff salaries 325,000 16 Office Supplies @ $4/unit plus fixed amount 4 48,000 6,000 17 Miscellaneous administrative expenses @ $1/unit + fixed amount 1 12,000 8,700 18 TOTALS $90 $1,080,000 $1,152,000 19 20 REQUIREMENT #2: Using your calculations above, prepare a basic Contribution Margin Income Statements below. Be sure and complete the Current Estimates calculations to the right of the 21 statement 22 23 FRONT RANGE FURNITURE CURRENT ESTIMATES 24 Contribution Margin Income Statement - current estimates Contribution Margin per unit 25 For the year ended December 31, 20xx Contribution Margin Ratio 26 Sales (12,000 x $240) $2,880,0001 Break-Even In Units 27 Less: Variable Costs (12,000 $90) $1,080.000 Break Even In Dollars 28 Contribution Margin $1,800,000 Margin of Safety in dollars 29 Less: Fixed Costs 1,152.000 Margin of Safety (percentage) 30 Net Income (or Loss) $648,000 Degree of Operating Leverage 31 5 CDs IV Flavible Andets W4 Capital Budgeting REQUIREMENT #3: Repeat requirement #2 under the two independent "What If" scenarios: WHAT IF SCENARIO #1: If total fixed manufacturing costs can be decreased by 125,000, what are the revised CVP analysis results as a result of that change? WHAT-IF SCENARIO #2: If total fixed costs increase by $250,000, and to offset the added cost management decides to increase sales price by 20%, causing total sales to decline 15% as a result of that change, what are the revised CVP analysis results as a result of those changes? FRONT RANGE FURNITURE Contribution Margin Income Statement - "What if" #1 For the year ended December 31, 20xx Sales (12,000 x $240) Less: Variable Costs (12,000 x $90) Contribution Margin Less: Fixed Costs Net Income (or Loss) WHATIF SCENARIO #1 Contribution Margin per unit Contribution Margin Ratio Break-Even In Units Break-Even in Dollars Margin of Safety in dollars Margin of Safety (percentage) Degree of Operating Leverage FRONT RANGE FURNITURE Contribution Margin Income Statement - "What-if" #2 For the year ended December 31, 20xx Sales (12,000 x 85%) x ($240 x 120%) Less: Variable Costs (12,000 x 85%) * $90) Contribution Margin Less: Fixed Costs Net Income (or Loss) WHAT IF SCENARIO #2 Contribution Margin per unit Contribution Margin Ratio Break-Even in Units Break-Even In Dollars Margin of Safety in dollars Margin of Safety (percentage) Degree of Operating Leverage ESTIMATED SALES What If #11 What If 82 Sales Volume in units Sales Price per unit Total estimated sales revenue $ol