X55 D CVP Modeling Posjet The purpose of this project is to give you experience creating a moproduct profitability analysis that can be used to determine the effects of changing beses conditions on a client's financial comectly ripple through the entire profitability as executed properly, the client should be this spreadsheet over and over, using different pos ale to Aer taking business classes, ting unique pet supplies at trade shows. He has two products Product Launch it a ten ball thrower that s $10. 24 15 Product 2 Treat time an automat 16 pew on the pedal. The treat dupenier wit that releases a treat when the dog places his $30 17 18 19 20 21 22 Jake is purchasing the products from a supplier in Mexico Launch it cost $1 each Treat-times co 25 24 27 Cast: Jake has hired my work t trade show booths. The work contract is $1,000 per Shipping and handing on the Launch-s cost $2 each; Shipping and handling on the Treat time which are heavier, cast 50 each. The shipping and handling costs are paid by lake, not the customer. Jake expects to sell 200 Launch and 100 Treat times during his company's first month of operation De 29 Jake's financial goal is to earn an operating income le profit of $8,000 per month. 43 M 46 47 M He believes volume will grow Intressin You have been hired by Jake to build a CVP model that will help him understand the impact of business conditions on his operating income (see "Starting Worksheet) in the model, all of the original assumptions are listed in one area of the spreadsheet (e ASSUMPTIONS box Mest of the values in the assumptions section must be typed-in other than subtotals and tal All other calculations in the model must reference the assumptions (blue box) such that if any assumption changes, the affect wil automatically calculate throughout the entire madel. To accomplish this post, une formules with absolute and/or relative cel references, rather than hard-coded or typed in numbers, in all other sections of the worksheet FORMATTING Round all UNITS to the nearest whole unit. Use the "decrease decimals" button on your tool bar rather than the Rounding function Show all MONETARY amounts as dollars and cents. Round to the nearest cent. (Sxxx). Use the "decrease decimals" button rather than the rounding function Show all percentages as N, not as decimals (notxx) Right justify all cells (numbers should be to the right side of the cell, not in the middle or left) 1) Complete the assumptions Due box) based on the data about lake's business, identify and stal variable costs separately and all fed costs separately before finding the total for each type of co 2) Complete the Product Analysis (yellow boxes) assuming Jake only sells either Product #1 (Launch Product #2 (Treat time Check figures: B/E Product #1250 unit: 8/ Product #2125 units 3) Complete the pro forma CM income Statement for the month of June green box) HINT: On product line income statements such as this, the fixed costs are only ted in the total column. Make sure you also show the totals for all other line items. Finally, calculate the overall WACMS for the company Check figure Operating income 5900 WACM-48% 4) Calculate the weighted average contribution margin (WACM) per unit (in orange box Check figure: WACM/$8.00 5) Use the WACM/unit to calculate the TOTAL number of units needed to breakaven (TOTAL column in the first grey box. THEN, calculate the number of EACH type of product needed to breakeven Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in t Check figures / Product #1-125; 8/ Product82-63 6) Use the WACM/unit to calculate the total number of units needed to achieve lake's target profe (TOTAL con in the second gr be) THEN, calculate the number of EACH type of product needed to achieve the target profe. Finally, calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total Check figures / Product #1-752; B/E Product2-336 7) Calculate the MOS using June sales as the expected sales (purple box) Calculate the MOS in terms of sales nevada percentage. Also calculate the current operating leverage factor bround to the nearest 2 decimal places) and use it to determine the expected percentage change in operating income stemming from an expected change in sales volume Check figures MOSN 38% Operating leverage factor 2.67 Change name of worksheet to "Original Assumptio Make sure to clean up the worksheet using the formatting conventions listed above 100 Go to the "Client Scenaries worksheet and follow the directions found there