Toby wants to perform some CVP analysis on fertilizing jobs. On one job, she used 40 pounds of fertilizer that she bought in bulk ($1,000 for 2,000 pounds). It took her employee 1.5 hours to spread the fertilizer (she is paid $15/hour) with the motorized spreader. Toby paid $4,000 for the spreader three years ago and it is estimated to last 10 years. To get to the job site, a company truck and trailer was used (cost: $40,000 expected to last 10 years). This was the only use of the truck and trailer that day. Additional employee costs include 10% payroll tax and $730 per year in workers compensation insurance. You may assume an employee works 2,000 hours per year on various tasks (not exclusively on fertilizing). Toby currently charges her customers $2.12 per pound to spread fertilizer.

As an alternative to estimating costs with the information above, Toby has collected some cost data over the past year (costs and pounds of fertilizer spread by month see below table). Use both methods of account analysis and regression to estimate variable and fixed costs to complete the analysis - one sheet for comparison and one for the actual regression.

Use calculations done by formula within Excel (including cell references). Separate and label the parts of the calculation as Variable costs (VC), Contribution Margin (CM), Fixed Cost (FC) as you calculate the annual breakeven (BE) point for fertilizer (in pounds),

How many pounds must be spread to earn a target profit of $1,000?

What is the margin of safety on that target profit?

How many pounds must be sold (spread) if Toby wants a margin of safety of 10% of sales?

Is there any additional information needed to making these calculations?

Month	Units	Cost
Jan	200	5360
Feb	150	5408
Mar	250	5510
April	450	5704
May	350	5550
June	300	5405
July	200	5305
Aug	250	5509
Sept	375	5458
Oct	425	5700
Nov	175	5300
Dec	100	5250