Based on this information, your team will prepare a segmented (contribution margin) income statement for Bene Petit. The statement should be created in Excel and should include formulas linking to the starting data above so that students can easily perform what if and goal seek analysis, including the following independent decision scenarios. A starting excel file is provided to get you started. Some check figures are given in Scenario 1 to ensure that your preliminary analysis is on target. Scenario 1: COST-VOLUME-PROFIT ANALYSIS What was Bene Petits net operating income during the first year of operations? o Check Figure: $36,000 What was the average contribution margin per customer meal sold? o Check Figure: $9 per customer meal What was the overall contribution margin ratio (as a percentage of total sales revenue)? o Check Figure: 59.02%

Based on the starting spreadsheet, you should prepare an analysis of the following scenarios: Scenario 1: COST-VOLUME-PROFIT ANALYSIS Compute the break-even point based on Bene Petits breakeven point based on the current mix of customer meals. o How many single-, dual- and family-sized meals must be sold to breakeven? o How much is total sales revenue at the breakeven point? What was Bene Petits margin of safety for the first year of operations? What is Bene Petits degree of operating leverage for the first year of operations? If sales increase by 10% during the second year of operations, how much operating profit will Bene Petit earn, assuming all other variables remain the same? If the sales mix shifts to 10% single serving, 20% dual serving and 70% family-size, how many total meals must be sold to earn $106,000 in net operating income. If Bene Petit wants to increase net operating income to $121,000 by changing only the selling price per serving, what should the new price be? Hint: Use the goal-seek function in excel (select data/what-if analysis/goal seek) to target net operating income by allowing the sales price per serving to change.

Bene Petit First year operating data: Single (1 serving) Dual (2 servings Family (4 servings) Total Customer Meals Sold 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 1,250 3,000 5,000 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) 3,000 5,000 12,000 20,000 6 10 24 40 Additional information about selling prices, variable costs and fixed costs is summarized below: . . The 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. Delivery expense for customer meals is $2 per customer order. The incremental cost of producing donated meals is $1.25 per meal. Delivery expense to community partners is $125 per delivery. 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. . O Note: Fill in formulas for all of the highlighted cells. Single Serving Dual Serving Family Size $ 15,000 Total 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 Number of Donated Deliveries Total Sales Revenue ($5 per serving) Less: Variable costs: Customer Meals: Direct Materials ($1 per customer serving) Direct Labor ($0.75 per customer meal) Variable Manufacturing Overhead (60% of Direct labor) Customer Delivery Expenses ($2 per customer order) Total Variable Cost Per Customer Meal Donated Meals: Variable Manufacturing Cost ($1.25 per donated meal) Donation Delivery Expense ($125 per delivery) Total Variable Cost per Donated Meal Total Variable Costs Total Contribution Margin ess: Fixed Costs Allocated Based on Sales Revenue Fixed Manufacturing Expenses Fixed Selling Expenses Fixed Administrative Expenses Total Fixed Expenses Net Operating Profit Price Per Serving Variable Costs: Customer Meals Direct Materials ($1 per serving) Direct Labor ($0.75 per customer meal) Variable Manufacturing Overhead 60% of Variable delivery expenses (customer me Donated Meals: Variable Manufacturing cost of donated m Variable delivery expenses (donated meal: Fixed costs: Fixed manufacturing costs #NAME? $ $ $ 75,000 29,000 40,000 144,000 (144,000) $ Bene Petit First year operating data: Single (1 serving) Dual (2 servings Family (4 servings) Total Customer Meals Sold 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 1,250 3,000 5,000 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) 3,000 5,000 12,000 20,000 6 10 24 40 Additional information about selling prices, variable costs and fixed costs is summarized below: . . The 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. Delivery expense for customer meals is $2 per customer order. The incremental cost of producing donated meals is $1.25 per meal. Delivery expense to community partners is $125 per delivery. 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. . O Note: Fill in formulas for all of the highlighted cells. Single Serving Dual Serving Family Size $ 15,000 Total 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 Number of Donated Deliveries Total Sales Revenue ($5 per serving) Less: Variable costs: Customer Meals: Direct Materials ($1 per customer serving) Direct Labor ($0.75 per customer meal) Variable Manufacturing Overhead (60% of Direct labor) Customer Delivery Expenses ($2 per customer order) Total Variable Cost Per Customer Meal Donated Meals: Variable Manufacturing Cost ($1.25 per donated meal) Donation Delivery Expense ($125 per delivery) Total Variable Cost per Donated Meal Total Variable Costs Total Contribution Margin ess: Fixed Costs Allocated Based on Sales Revenue Fixed Manufacturing Expenses Fixed Selling Expenses Fixed Administrative Expenses Total Fixed Expenses Net Operating Profit Price Per Serving Variable Costs: Customer Meals Direct Materials ($1 per serving) Direct Labor ($0.75 per customer meal) Variable Manufacturing Overhead 60% of Variable delivery expenses (customer me Donated Meals: Variable Manufacturing cost of donated m Variable delivery expenses (donated meal: Fixed costs: Fixed manufacturing costs #NAME? $ $ $ 75,000 29,000 40,000 144,000 (144,000) $