Income Statement for Sheffield Aerospace Materials for the year ended 31 st October 2022. Revenue 13,340,000 Cost
Question:
Income Statement for Sheffield Aerospace Materials for the year ended 31st October 2022.
Revenue | 13,340,000 | |
Cost of Sales | (6,450,000) | |
Gross Profit | 6,890,000 | |
Selling + Distribution Expenses | (2,390,000) | |
Administration | (1,950,000) | |
Net Profit | 2,550,000 |
Statement of Financial Position for Sheffield Aerospace Materials as at 31st October 2022.
Non-Current Assets | ||
Land & Buildings | 9,750,000 | |
Vehicles | 320,000 | |
10,070,000 | ||
Current Assets | ||
Inventories / Stock | 1,345,000 | |
Trade Receivables | 550,000 | |
Cash / Bank | 2,250,000 | |
4,145,000 | ||
Total Assets | 14,215,000 | |
Current Liabilities | ||
Trade Payables | 1,945,000 | |
Non-Current Liabilities | ||
Bank Loan | 4,000,000 | |
Capital and Reserves | ||
Shares | 1,000,000 | |
Retained profits | 7,270,000 | |
Total Liabilities | 14,215,000 |
APPENDIX 2 – Key Product Information Sheet
Information relating to Scenario 1 – Product Epsilon
Estimated Sales 8,500 units
Selling price per unit £175
Direct Material Costs £65 per unit
Selling Costs £435,000
Admin Costs £225,000
Production Capacity 9,500 units
Accounting Additional Information
Additional information related to Sheffield Aerospace Materials required to update the Statement of Financial Position:
Increase in land and buildings £800,000
Increase in trade payables £250,000
Loan obtained on 1st November for £275,0000
Additional Profit £xxxx (to be calculated based on revenues and costs above)
Assumptions
There will be no change in the cash balance held by the company. There will also be no change to the level of trade receivables
Tax can be ignored.
Investment Appraisal Additional Information
Total Investment £1,050,000
Assume Total Revenues of £1,487,500 per year, Direct costs £552,500 , Selling Costs of £435,000 and Admin costs of £225,000
The finance director has estimated the cost of capital is 11% and the product would be on sale for 5 years.
Calculate:
The contribution per unit
The break-even point and the margin of safety
The required number of units to hit target profit.
Clearly explain each figure you have calculated and what this means for the firm.
If the firm makes the target profit based on estimated sales and the additional information in appendix two produce a revised Statement of Financial Position.
(30 % weighting)
Calculate the Payback Period and Net Present Value for the product.
Financial Accounting and Reporting
ISBN: 978-1292162409
18th edition
Authors: Barry Elliott, Jamie Elliott