Standup Paddleboarding (SUP) has been growing in popularity over the past five years, and Superior SUP Ltd. has benefitted from the trend. The company produces SUP accessories: a boardbag to shield the boards from UV rays when the board is stored outside, a lightweight aluminum paddle, and leashes worn around the ankle to ensure the paddleboard and rider are not separated. Sven Swift, the only shareholder of Superior SUP Ltd., has been very conservative in managing the growth of the business. Sven expects the favourable trend for paddleboarding to continue and is considering options to grow the business. In particular, Sven has been attending trade shows over the past year and has become aware of a growing demand for carbon paddles which are lighter and more responsive than the aluminum paddles used by most beginning riders.

Sven has scheduled a meeting with his senior managers to discuss options for the business. He has also compiled some key historical financial data regarding volume, sales prices, and production costs of the three products sold to date and carbon paddles that may be sold in the future. Planning was perfect in the prior-year (as is only possible in a case study!) and the assumption is that there is no inventory at the beginning and end of the year. The prior-year data is presented below:

FYI

Key Historical Data for Superior SUP Ltd. Fixed annual costs for the company are as follows: - Fixed manufacturing overhead* $240,000 - Corporate fixed expenses: - Research and development $20,000 - Selling and marketing $58,000 - General administrative $25,000 "Fixed manufacturing overhead is allocated to segments based on variable overhead amounts. All three managers have received the above information and were asked to review it prior to the meeting. In addition, Sven has provided the regarding business performance next year. Specifically, he expects product sales prices to remain unchanged, sales volumes for all products to increase by 12%, product variable costs to increase by 3%, and all fixed costs to be held to an increase of 2%. option they develop must focus on the paddleboarding industry. He also advised the managers that the banks are threatening to increase the company's borrowing rate if he is unable to demonstrate that next year's profit margins will improve. The following three options were presented at the strategy meeting. Sam Louise, Marketing Manager Sam has been attending the same trade shows as Sven over the past year and has also become aware of a growing demand for carbon paddles. In his presentation, Sam recommended introducing a new carbon paddle No additional equipment is required. All of Sven's assumptions were maintained in Sam's scenario, except that last year's quantity of unit sales of the aluminum paddle would be displaced by the new paddle at a rate of 1 aluminum paddle for every 4 carbon paddles sold. Sam forecasted sales of 8,000 carbon paddles at a price of $240 each. Sam has determined that direct material costs will be $66 per carbon paddle, direct labour costs will be $55 per paddle, and variable overhead will be 10% of direct labour costs. 1. Prepare FIVE budgeted segmented income statements (i.e., one for each of the prior year for Sam's budget) using Microsoft Excel spreadsheet software and following the budgeted segmented income statement format presented below. Present each income statement on a separate worksheet in a single Excel workbook. Ignore taxes. Add a column for Carbon Paddles for Sam's forecast conducted. For Olivia's situation, if 8,000 carbon paddles will be sold, does displacing 1 aluminum paddle for every 4 carbon paddles mean only 2,000 aluminum paddles will be sold? Answer: No. It means that 2,000 fewer aluminum paddles will be sold than were sold in last year, adjusted by the 12% increase that Sven projects. Key Historical Data for Superior SUP Ltd. Fixed annual costs for the company are as follows: - Fixed manufacturing overhead* $240,000 - Corporate fixed expenses: - Research and development $20,000 - Selling and marketing $58,000 - General administrative $25,000 "Fixed manufacturing overhead is allocated to segments based on variable overhead amounts. All three managers have received the above information and were asked to review it prior to the meeting. In addition, Sven has provided the regarding business performance next year. Specifically, he expects product sales prices to remain unchanged, sales volumes for all products to increase by 12%, product variable costs to increase by 3%, and all fixed costs to be held to an increase of 2%. option they develop must focus on the paddleboarding industry. He also advised the managers that the banks are threatening to increase the company's borrowing rate if he is unable to demonstrate that next year's profit margins will improve. The following three options were presented at the strategy meeting. Sam Louise, Marketing Manager Sam has been attending the same trade shows as Sven over the past year and has also become aware of a growing demand for carbon paddles. In his presentation, Sam recommended introducing a new carbon paddle No additional equipment is required. All of Sven's assumptions were maintained in Sam's scenario, except that last year's quantity of unit sales of the aluminum paddle would be displaced by the new paddle at a rate of 1 aluminum paddle for every 4 carbon paddles sold. Sam forecasted sales of 8,000 carbon paddles at a price of $240 each. Sam has determined that direct material costs will be $66 per carbon paddle, direct labour costs will be $55 per paddle, and variable overhead will be 10% of direct labour costs. 1. Prepare FIVE budgeted segmented income statements (i.e., one for each of the prior year for Sam's budget) using Microsoft Excel spreadsheet software and following the budgeted segmented income statement format presented below. Present each income statement on a separate worksheet in a single Excel workbook. Ignore taxes. Add a column for Carbon Paddles for Sam's forecast conducted. For Olivia's situation, if 8,000 carbon paddles will be sold, does displacing 1 aluminum paddle for every 4 carbon paddles mean only 2,000 aluminum paddles will be sold? Answer: No. It means that 2,000 fewer aluminum paddles will be sold than were sold in last year, adjusted by the 12% increase that Sven projects