a. Prepare a profit graph for Donaldson Company. To prepare your graph, use sales volumes of...

  

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a. Prepare a profit graph for Donaldson Company. To prepare your graph, use sales volumes of zero units and 50,000 units as shown in cells B23 and B24. As a first step, create a formula in cell C23 that computes the profit when unit sales are zero. Your formula should reference data from the contribution format income statement provided in rows 4 through 18 of the worksheet. As a second step, copy your formula from cell C23 to cell C24. The profit (or loss) shown in cells C23 and C24 provide the two data points that you need to create a profit graph. b. Prepare a CVP graph for Donaldson Company. To prepare your graph, use sales volumes of zero units and 50,000 units as shown in cells B29 and B30. As a first step, create formulas in cells C29, D29, and E29 that compute the total sales dollars, total fixed expenses, and total expenses when unit sales are zero. Your formulas should reference data from the contribution format income statement provided in rows 4 through 18 of the worksheet. As a second step, copy your formulas from cells C29, D29, and E29, to cells C30, D30, and E30. The information shown in rows 29 and 30 provide the data points that you need to create a CVP graph. Data Inputs: Unit sales 40,000 Selling price per unit $ 12.50 Variable expense per unit 7.50 Total fixed expenses $ 180,000 Contribution Format Income Statement Margin of Safety Total Per Unit % Actual sales (a) $ 600,000 Sales $ 600,000 $ 12.50 100% Break-even sales (b) $ 437,500 Variable expenses 300,000 7.50 60% Margin of safety in dollars (a) – (b) $ 162,500 Contribution margin 300,000 $ 5.00 40% Margin of safety percentage 27.08% Fixed expenses 175,000 Net operating income $ 125,000 Net profit margin percentage 20.83% Profit Graph Information Profit Data Points 50,000 CVP Graph Information Sales Dollars Fixed Expenses Total Expenses Data Points 50,000 a. Prepare a profit graph for Donaldson Company. To prepare your graph, use sales volumes of zero units and 50,000 units as shown in cells B23 and B24. As a first step, create a formula in cell C23 that computes the profit when unit sales are zero. Your formula should reference data from the contribution format income statement provided in rows 4 through 18 of the worksheet. As a second step, copy your formula from cell C23 to cell C24. The profit (or loss) shown in cells C23 and C24 provide the two data points that you need to create a profit graph. b. Prepare a CVP graph for Donaldson Company. To prepare your graph, use sales volumes of zero units and 50,000 units as shown in cells B29 and B30. As a first step, create formulas in cells C29, D29, and E29 that compute the total sales dollars, total fixed expenses, and total expenses when unit sales are zero. Your formulas should reference data from the contribution format income statement provided in rows 4 through 18 of the worksheet. As a second step, copy your formulas from cells C29, D29, and E29, to cells C30, D30, and E30. The information shown in rows 29 and 30 provide the data points that you need to create a CVP graph. Data Inputs: Unit sales 40,000 Selling price per unit $ 12.50 Variable expense per unit 7.50 Total fixed expenses $ 180,000 Contribution Format Income Statement Margin of Safety Total Per Unit % Actual sales (a) $ 600,000 Sales $ 600,000 $ 12.50 100% Break-even sales (b) $ 437,500 Variable expenses 300,000 7.50 60% Margin of safety in dollars (a) – (b) $ 162,500 Contribution margin 300,000 $ 5.00 40% Margin of safety percentage 27.08% Fixed expenses 175,000 Net operating income $ 125,000 Net profit margin percentage 20.83% Profit Graph Information Profit Data Points 50,000 CVP Graph Information Sales Dollars Fixed Expenses Total Expenses Data Points 50,000

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