ch 5 excel

Excel SIM: High-Low Method; Contribution Format Income Statement Analyze a mixed cost using a scattergraph plot and the high-low method. Prepare income statements for a merchandising company using the traditional and contribution formats.

A1 fie To aid in planning, Jay Corporation is preparing a contribution format income B D E F 1 To aid in planning, Jay Corporation is preparing a contribution format income statement. 4 3 Budgeted information for Quarter 1 of Year 3: Sales in units 17,000 5 Sales price per unit $ 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. 8 Cost of goods sold $ 29.00 per unit 9 Sales commissions 9.50% per dollar of sales 10 11 Administrative salaries 45,000.00 per quarter 12 Rent expense $ 27,000.00 per quarter 13 Depreciation expense $ 36,000.00 per quarter 14 $ 15 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 16 17 Year 1 Total Shipping Cost Units 18 Quarter 1 $ 67,000.00 12,500 19 Quarter2 94,000.00 21,000 20 Quarter 3 $ 89,800.00 13,800 21 Quarter 4 92,600.00 20,000 22 Year 2 Quarter 1 7 500.00 13.20 Sheet1 $ $ 23 --- READY 10 A1 X fi To aid in planning, Jay Corporation is preparing a contribution format income B D E F $ 92,600.00 20,000 21 Quarter 4 22 Year 2 23 Quarter 1 24 Quarter 2 25 Quarter 3 26 Quarter 4 $ $ $ $ 72,500.00 80,000.00 84,000.00 100,000.00 13,700 14,000 14,300 22,500 27 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 Total Shipping Cost Units 32 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable cost per unit 38 40 41 39 Compute the fixed cost portion using the high level of activity. Total cost at high level of activity Less: Variable cost element 42 Total fixed cost 43 44 Prepare a contribution format income statement for Quarter 1 of Year 3 Sheet1