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Whitcomb Foods is a small company in Oregon that packages and sells organic juices. Recently, a sales rep from one of the company's suppliers
Whitcomb Foods is a small company in Oregon that packages and sells organic juices. Recently, a sales rep from one of the company's suppliers suggested that Whitcomb could increase its profitability by 50 percent if it introduced a second line of products, packaged dried fruit for snacks. The rep offered to do the analysis and show the company the assumptions made. When Whitcomb's management opened the spreadsheet sent by the sales rep, they noticed that there were several blank cells. In the meantime, the sales rep had taken a job with a competitor and told the managers at Whitcomb that "I can no longer advise you." Although they were not sure they should rely on the analysis, they asked you to see if you could reconstruct the sales rep's analysis. They had been considering this new business already and wanted to see if their analysis was close to that of an outside observer. Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales Costs WHITCOMB FOODS Projected Annual Income Statement Status Quo: % Increase Single Product Alternative: Two (Decrease) Products Difference 30 % $ 210,600 Material 33,000 40 % 46,200 13,200 Labor 20 % Rent 0% Depreciation 6,600 25% 8,250 1,650 Utilities 3,600 25 % Other 11,100 % 15,540 4,440 Total costs $ 120,000 Operating profit $ 42,000 %
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