Variable S&A 174.000 Variable Costs: Direct Material Direct Labor Variable Overhead Dorilane Company-Summary of Cost Structure Total Dollars 432000 91,000 18000 Per unit/set (show 2 decimals) Notes 113.68 per unit 23.95 per unit 4.74 Per unit 45.79 Total Variable Costs 715000 188,16 per unit ber unit Fixed Overhead Fixed S&A 277000 97000 Totals totals Total Fixed Costs Total Costs 374000 1089000 Dorilane Company NEW Cost Structure Change New Per unit/set or Cost Notes Sales Variable Costs: Direct Material Increase by $40 443 Per unit Decrease by 8% 104.59 Per unit Direct Labor Increase by 12% 26.824 Per unit Variable Overhead Variable S&A Total Variable Costs Fixed Overhead Fixed S&A Total Fixed Costs Decrease $ 0.30 per unit Increase by $ 0.25 per unit 4.44 46.04 181.894 Per unit Per unit Per unit Increase by $300,000 577 000 Total Ss Increase by 150,000 247000 Total Ss 824 000 Total Ss 2) Compare the ORIGINAL and the NEW cost structures. (Refer to Lecture Packet 1.2 item 2 for demonstration) a) Complete the following for Dorilane Company. (Show 2 decimals) Sales price per unit Variable cost per unit CM per unit (CMunit) Total Fixed Expenses ORIGINAL b) Use the summarized cost structure to complete the CVP Profit formula below: ORIGINAL: NOI = NEW: NOI = Q- Q- NEW i) Include the CMunit amount in the first space of the formula above (highlighted yellow). Add the fixed manufacturing overhead and the fixed selling and administrative expenses together. Include the total fixed costs in the second space of the formula above. highlighted green) c) Use the CVP profit formalas for both ORIGINAL and NEW cost structures, calculate the following: i) If Dorilane company produced and sold 2,500 furniture sets, what would their Net Operating Income be? 1) If Dorilane Company wanted to earn a profit (NOT) of $850,000, how many units would they need to sell? 3) Base scenario calculations: With the planned expansion, the company anticipates sales levels to flatten out close to 8,000 units. (Refer to Lecture Packet 1.2 items 3 thru 5) a) Which cost structure should they use? Why? Note: Your answer should be in complete sentences and 30 to 50 words