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These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part
These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Bene Petit First Year Operating Data: Single (1 serving) Dual (2) servings) Family (4) servings) Total 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 1,250 3,000 5,000 3,000 6 5,000 12,000 20,000 10 24 40 Customer Meals Sold Total Customer Servings Customer Orders (Average = 4 meals per order) Number of Donated Meals (1 per customer meal) Number of Donated Deliveries (500 meals per delivery) Additional information about selling prices, variable costs, and fixed costs is summarized below: The average sales price for customer meals is $5 per serving. The average direct materials (ingredients) cost of customer meals is $1 per serving. Direct labor costs average $0.75 per customer meal. Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. The delivery expense for customer meals is $2 per customer order. The incremental cost of producing the donated meals is $1.25 per meal. The delivery expense for donated meals is $125 per delivery to community partners. . The following fixed costs are allocated to customer meals based on total sales revenue: Fixed manufacturing overhead costs are $75,000 per year. Fixed selling expenses are $29,000 per year. Fixed administrative expenses are $40,000 per year. The attached excel file shows a contribution margin income statement based on these starting assumptions. You should return to this starting spreadsheet for each part of the case below. 1. Treat the following questions as independent scenarios. Use the starting spreadsheet to answer the following questions. a. What was Bene Petit's net operating income during the first year of operations? Net operating income b. What was the average contribution margin per customer meal sold? Average contribution margin per customer meal c. What was the overall contribution margin ratio (as a percentage of total sales revenue)? Note: Enter the percentage to two decimal places. Overall contribution margin ratio % d. What is Bene Petit's degree of operating leverage for the first year of operations? Degree of operating leverage A B D E F H J K 1 Single Serving Dual Serving Family Size Total 2 Total Sales Revenue ($5 per serving) $ 15,000 $50,000 $240,000 $ 305,000 3 4 Less: Variable costs: 5 Customer Meals: 6 Direct Materials ($1 per customer serving) $ 3,000 $ 10,000 $ 48,000 $ 61,000 7 Direct Labor ($0.75 per customer meal) 2,250 3,750 9,000 15,000 Input Values: Number of Customer Meals Sales mix (% of customer meals) Number of Servings per Meal Number of Servings Number of Customer Orders Number of Donated Meals 8 Variable Manufacturing Overhead (60% of Direct labo 1,350 2,250 5,400 9,000 Number of Donated Deliveries Dual Family Single Serving Serving 3,000 5,000 Size Total 12,000 20,000 15% 1 25% 60% 100% 2 4 3,000 750 3,000 6 10,000 1,250 48,000 61,000 3,000 5,000 5,000 10 12,000 24 20,000 40 9 Variable Manufacturing Cost ($1.25 per donated mea 3,750 6,250 15,000 25,000 10 Customer Delivery Expenses ($2 per customer order) 1,500 2,500 6,000 10,000 Price Per Serving $ 5.00 per customer serving 11 Donation Delivery Expense ($125 per delivery) 750 1,250 3,000 5,000 Variable Costs: 12 Total Variable Costs $ 12,600 $ 26,000 $86,400 $ 125,000 Direct Materials ($1 per serving) $ 1.00 per customer serving 13 Direct Labor ($0.75 per customer meal) $ 0.75 per customer meal 14 Total Contribution Margin $ 2,400 $24,000 $ 153,600 $ 180,000 15 Less: Fixed Costs Allocated Based on Sales Revenue 16 Fixed Manufacturing Expenses $ 17 Fixed Selling Expenses 18 Fixed Administrative Expenses 6,557 3,689 $ 12,295 $ 59,016 $ 75,000 1,426 4,754 22,820 1,967 31,475 19 Total Fixed Expenses 20 Net Operating Profit 7,082 23,607 $ (4,682) $ Single 393 Dual 29,000 40,000 113,311 144,000 $40,289 $ 36,000 Variable Manufacturing Overhead 60% of D Variable cost of donated meals Variable delivery expenses (customer meals) $ Variable delivery expenses (donated meals) $ 60% of direct labor cost $ 1.25 per donated meal 2.00 per customer order 125.00 per delivery Fixed costs: Fixed manufacturing costs $ 75,000 21 22 Average Contribution Margin Per Meal Sold 23 Average Contribution Margin Ratio (% of Revenue) 24 Serving Serving Family Size Overall Fixed selling expenses $ 29,000 $ 0.80 $ 4.80 $ 12.80 $ 9.00 Fixed administrative expenses $ 40,000 59.02% Total Fixed costs $ 144,000 25 26 Break-even point (customer meals sold) 27 Break-even point (total sales revenue) 28 29 Margin of Safety (Customer Meals) 30 Margin of Safety (Sales $) 31 32 Degree of Operating Leverage Dual Single Serving Serving Family Size Total
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