6:20 @ all 56 @ Q=B AT WS nswers are entered in the cells with gray backgrounds. ells with non-gray backgrounds are protected and cannot be edited. n asterisk (*) will appear to the right of an incorrect entry. Valdespin Company Variable Costing Income Statement For the Year Ended June 30, 20Y9 S Sales Variable cost of goods sold Manufacturing margin Variable operating expenses Contribution margin Fixed costs: Manufacturing costs Operating expenses Total fixed costs Operating income If Proposal 2 is accepted: Contribution margin for Size M Less: Reduction in fixed production costs Reduction in fixed operating expenses Reduction in annual operating income Valdespin Company Variable Costing Income Statement For the Year Ended June 30, 20Y9 Sales Variable cost of goods sold Manufacturing margin Variable operating expenses Contribution margin Fixed costs: Manufacturing costs Operating expenses (including additional rent) Total fixed costs Operating income If Proposal 3 is accepted: Operating income, Proposal 3 Operating income, present conditions (part 1) Increase in operating income D & =l n Dashboard Calendar To Do Notifica... Inbox 6:20 5G8 66 Back PR_21-5A_data.png ement is considering three proposals: (1) continue Size M, (2) discontinue Size M and total output accordingly, or (3) discontinue Size M and conduct an advertising campaign the sales of Size S so that the entire plant capacity can continue to be used. osal 2 is selected and Size M is discontinued and production curtailed, the annual fixed ction costs and fixed operating expenses could be reduced by $46,080 and $32,240, ively. If Proposal 3 is selected, it is anticipated that an additional annual expenditure of 0 for the rental of additional warehouse space would yield an additional 130% in Size S olume. It is also assumed that the increased production of Size S would utilize the plant s released by the discontinuance of Size M. les and costs have been relatively stable over the past few years, and they are expected so for the foreseeable future. The income statement for the past year ended June 30, 2 llows: Size S M Total Sales . . ... .. ...... ... $ 668,000 $ 737,300 $ 956,160 $ 2,361,460 Cost of goods sold: Variable costs ....... . .... $(300,000) $(357,120) $(437,760) $(1,094,880) Fixed costs .... . .......... (74,880) (138,250) (172,800) (385,930) Total cost of goods sold $(374,880) $(495,370) $ (610,560) $(1,480,810) Gross profit . . ..... . ......... $ 293,120 $ 241,930 $ 345,600 $ 880,650 Operating expenses: Variable expenses ........ $(132,480) $(155,500) $ (195,840) $ (483,820) Fixed expenses . .. (92,160) (103,680) (115,200) (311,040) Total operating expenses . $(224,640) $ (259,180) $ (311,040) $ (794,860) Operating Income (loss) ..... $ 68,480 $ (17,250) $ 34,560 85,790 uctions e an income statement for the past year in the variable costing format. Use the following gs: Size S M Total r each size should be reported through contribution margin. The fixed costs should be ed from the total contribution margin, as reported in the "Total" column, to determine ing income. re: Contribution margin, Size S, $235,520 on the income statement prepared in (1) and the other data presented, determine the t by which total annual operating income would be reduced below its present level if al 2 is accepted. e an income statement in the variable costing format, indicating the projected annual 0= DOO 0= n Dashboard Calendar To Do Notifica... Inbox