See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $375,000.00 Salos 25,000 lamps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profit Selling Expenses: Food Variable (Commission per unk) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000.00 190,000.00 $185.000.00 1 See The Light Projected Balance Sheet As of December 31, 20x1 $ 34.710.00 67,500.00 8,000.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets Faced Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 $ 20,000.00 6.800.00 13,200.00 $213.410.00 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Eamings Total Stockholders Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147.410.00 159.410.00 $ 213.410.00 1 See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Case 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places Lamp Kit Labor Variable Overhead 16 2 4.50% 5.50% $16.64 $2.09 $2.11 (401) {4.02) {4.03) 2 Projected Variable Manufacturing Cost Per Unit $20.84 (4.04) Total Variable Cost Per Unit 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places Projected Percent Increase 5% 5% Variable Selling Variable Administrative Projected Variable Manufacturing Unit Cost 0.00 0.00 0 {4.05) (4.06) 4.04) Projected Total Variable Cost Per Unit 20.84 (4.07) Schedule of Fixed Costs 20x1 Cost 20x2 Cost Projected Percent Increase 30000 250000 $ 280,000.00 {4.08) lamps @_) Fixed Overhead (normal capacity of Fixed Selling Fixed Administrative $ $ 25,000.00 62,000.00 (4.09) {4.10) Projected Total Fixed Costs $ 367,000.00 [4.11) 1 See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 tarps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profil Selling Expenses: Fixed Variable (Commission per unit) $3.00 Administrative Expenses: Fixed Varable @ $2.00 Total Seling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000,00 190,000.00 $185.000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 8,000.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work In Process Finished Goods Total Current Assets Fxed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 500 @ $16.00 0 3000 $30.00 90,000.00 $ 200,210.00 $ 20,000.00 6.800.00 13,200.00 $213.410.00 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Eamings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159.410.00 $ 213.410.00 Page 5 PART 2 Cost Volume Relationships - Profit Planning Bio All about to begin work on the budget for 2012 and they have quested that you pmpare an analysis baned on the following assumptions Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuromore, to find the required sales in dotant may be easier to find the number of units and then multiply by the selling poe por unt 1. For 20x2 the soiling polo per lamp will be $45.00. What is the projected contribution margin and contribution min to foreach tomos Contribution Margin per unit (Round to two places, 500.000) 15.01) Contribution Margin Ratio (Round to four places, % is two of those places 8.00%) (502) 2. For 20x2 the selling price por lamp will be $45.00. The desired net income in 2012 is $190,000. What would sales in units have to be in 2012 to teach the groft goal? Breakeven sales in unks (Since we cannot del part of a unt round up to the next until noeded) (503) 3. For 202 the selling proo per lamp will be $45.00. the fred cost increase by $50,000.00 how many lamps must be sold to breakeven? Breakeven sales in unts (since we cannot tal part of a une round up to the next une if needed) (504) PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: $16.0000000 per lamp Direct Labor: 2.0000000 per lamp (4 tamps/hr.) Variable Overhead: 2.0000000 per lamp Fixed Overhead: 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases Tound to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.00%. 2. Labor Costs are expected to increase by 4,50% 3. Variable Overhead is expected to increase by 5.50%. 4. Foxed Overhead is expected to increase to $280,000.- 5. Fied Administrative expenses are expected to increase to $62,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.00%. 7. Fixed selling expenses are expected to be $25,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 5.00%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $375,000.00 Salos 25,000 lamps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profit Selling Expenses: Food Variable (Commission per unk) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000.00 190,000.00 $185.000.00 1 See The Light Projected Balance Sheet As of December 31, 20x1 $ 34.710.00 67,500.00 8,000.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets Faced Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 $ 20,000.00 6.800.00 13,200.00 $213.410.00 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Eamings Total Stockholders Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147.410.00 159.410.00 $ 213.410.00 1 See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Case 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 2 Decimal Places Lamp Kit Labor Variable Overhead 16 2 4.50% 5.50% $16.64 $2.09 $2.11 (401) {4.02) {4.03) 2 Projected Variable Manufacturing Cost Per Unit $20.84 (4.04) Total Variable Cost Per Unit 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places Projected Percent Increase 5% 5% Variable Selling Variable Administrative Projected Variable Manufacturing Unit Cost 0.00 0.00 0 {4.05) (4.06) 4.04) Projected Total Variable Cost Per Unit 20.84 (4.07) Schedule of Fixed Costs 20x1 Cost 20x2 Cost Projected Percent Increase 30000 250000 $ 280,000.00 {4.08) lamps @_) Fixed Overhead (normal capacity of Fixed Selling Fixed Administrative $ $ 25,000.00 62,000.00 (4.09) {4.10) Projected Total Fixed Costs $ 367,000.00 [4.11) 1 See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 tarps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profil Selling Expenses: Fixed Variable (Commission per unit) $3.00 Administrative Expenses: Fixed Varable @ $2.00 Total Seling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000,00 190,000.00 $185.000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 8,000.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work In Process Finished Goods Total Current Assets Fxed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 500 @ $16.00 0 3000 $30.00 90,000.00 $ 200,210.00 $ 20,000.00 6.800.00 13,200.00 $213.410.00 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Eamings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159.410.00 $ 213.410.00 Page 5 PART 2 Cost Volume Relationships - Profit Planning Bio All about to begin work on the budget for 2012 and they have quested that you pmpare an analysis baned on the following assumptions Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuromore, to find the required sales in dotant may be easier to find the number of units and then multiply by the selling poe por unt 1. For 20x2 the soiling polo per lamp will be $45.00. What is the projected contribution margin and contribution min to foreach tomos Contribution Margin per unit (Round to two places, 500.000) 15.01) Contribution Margin Ratio (Round to four places, % is two of those places 8.00%) (502) 2. For 20x2 the selling price por lamp will be $45.00. The desired net income in 2012 is $190,000. What would sales in units have to be in 2012 to teach the groft goal? Breakeven sales in unks (Since we cannot del part of a unt round up to the next until noeded) (503) 3. For 202 the selling proo per lamp will be $45.00. the fred cost increase by $50,000.00 how many lamps must be sold to breakeven? Breakeven sales in unts (since we cannot tal part of a une round up to the next une if needed) (504) PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: $16.0000000 per lamp Direct Labor: 2.0000000 per lamp (4 tamps/hr.) Variable Overhead: 2.0000000 per lamp Fixed Overhead: 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases Tound to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.00%. 2. Labor Costs are expected to increase by 4,50% 3. Variable Overhead is expected to increase by 5.50%. 4. Foxed Overhead is expected to increase to $280,000.- 5. Fied Administrative expenses are expected to increase to $62,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.00%. 7. Fixed selling expenses are expected to be $25,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 5.00%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs