CO C NOVA Knights just completed the 2022 fiscal period (January 1- December 31) and through...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
CO C NOVA Knights just completed the 2022 fiscal period (January 1- December 31) and through management analysis and review of the income statement the following information was determined: 1. Sales Revenue of $1,578,500 based on sales of 225,500 units. 2. Cost of Goods Sold totaled $1,014,750. 3.70% of COGS (Cost of Goods Sold) are variable. 4. Selling Expenses totaled $410,000. 5.45% of selling expenses are variable 6. Administrative Expenses totaled $189,300 7.40% of administrative expenses are variable Rounding and Calculation Instructions Round all costs per unit to 2 decimals FINAL break-even answers to the unit and dollar (no decimals). • DO NOT Round the contribution margin ratio. . You will NOT maintain the same percentages of variable vs. fixed costs in each of the proposed plans. . . Use either Google Sheets or Excel (recommended) for all parts of this project. Required: formulas, functions and cell referencing throughout the project. Part 1. Using the information above prepare, in good form, a GAAP (accrual basis) income statement. determine net income (loss) and compute the break-even point in total sales dollars and in units for 2022. Prepare a CVP income statement format for Part 2 (plans A and B). Part 2. PLAN A-Lorna has proposed a plan to improve its profitability. Lorna feels that the quality of the final product could be substantially improved by spending $0.23 more per unit on higher quality raw materials. The selling price per unit could be increased to $7.35. Lorna projects that sales volume will increase by 22% Compute net income under Lorna's proposal and the break even point in units and sales dollars MacBook Air 22%. Compute net income under Lorna's proposal and the break-even point in units and sales dollars. (DO NOT Round the contribution margin ratio.) PLAN B - Anh was a sales and marketing major in college. Anh believes sales volume can be increased by using an intensive online advertising and social media promotional campaign. She proposed the following plan as an alternative to Lorna's: (1) improve sales incentives by increasing sales commission for each sale, this will increase the following variable costs: cost of goods sold to $3.16/per unit, selling expenses to $0.85/per unit, administrative expenses to $0.55/per units, (2) increase the selling price per unit by $0.57, and (3) increase fixed selling expenses by $45,840. Anh based her recommendations on a marketing research report that suggested that sales volume would increase by 21% if these changes were made. Compute net income under Anh's proposal and the break-even point in unit and sales dollars. (DO NOT Round the contribution margin ratio.) Part 3. Which plan do you believe should be accepted and why? Using good written communication, completely. and thoroughly explain your answer. Your score for this category will be based significantly on your persuasiveness and effectiveness to "sell" your conclusion to executives in the company. Managerial Accounting Analysis Rubric 2Rubric (2) Criteria Accurate Solutions Calculations are accurate. using formulas in the spreadsheet. Written Analysis at the 60 to 30.0 pts Meets Expectations Evaluation based upon the extent to which formulas were used and the accuracy of the results. 20 to 15.0 pts Eurende Expectations Ratings 15 to 10.0 pts 30 to 0 pts Below Expectations If formulas are not used in the spreadsheet and/or calculations and results are not accurate. 10 to 0 pts Balans Eenectations Pts 60 pts Part 3. Which plan do you believe should be accepted and why? Using good written communication, completely and thoroughly explain your answer. Your score for this category will be based significantly on your persuasiveness and effectiveness to "sell" your conclusion to executives in the company. Managerial Accounting Analysis Rubric 2Rubric (2) Criteria Accurate Solutions Calculations are accurate using formulas in the spreadsheet. Written Analysis This will evaluate the written solutions provided. by the submission- accuracy, thoughtfulness of answers, supported conclusion, effective written communication. Format and Presentation This will evaluate the professionalism of the submission, Format. presentation and complete. 60 to >30.0 pts Meets Expectations Evaluation based upon the extent to which formulas were used and the accuracy of the results. 20 to 15.0 pts Exceeds Expectations Submission is very well written, clear and concise thoughts/ideas. Creative solutions, Well supported supported and accurate answers, Ratings 20 to >10.0 pts Meets Expectations Format and presentation of the project meets or exceeds expectations. 30 to 0 pts Below Expectations If formulas are not used in the spreadsheet and/or calculations and results are not accurate. 15 to 10.0 pts Meets Expectations Submission provides; adequate answers to all questions but does not elaborate on answers, provides effective or creative thoughts/ideas that are reasonable or well supported. 10 to 0 pts Below Expectations Below expectations ratings would result from inaccurate answers, not complete answers, poor spelling/grammar/written communication, Incomplete answers. 10 to 0 pts Below Expectations Organization and presentation of the data/tables, and written answers are average or below average. Pts 60 pts 20 pts 20 pts Total Points: 100 CO C NOVA Knights just completed the 2022 fiscal period (January 1- December 31) and through management analysis and review of the income statement the following information was determined: 1. Sales Revenue of $1,578,500 based on sales of 225,500 units. 2. Cost of Goods Sold totaled $1,014,750. 3.70% of COGS (Cost of Goods Sold) are variable. 4. Selling Expenses totaled $410,000. 5.45% of selling expenses are variable 6. Administrative Expenses totaled $189,300 7.40% of administrative expenses are variable Rounding and Calculation Instructions Round all costs per unit to 2 decimals FINAL break-even answers to the unit and dollar (no decimals). • DO NOT Round the contribution margin ratio. . You will NOT maintain the same percentages of variable vs. fixed costs in each of the proposed plans. . . Use either Google Sheets or Excel (recommended) for all parts of this project. Required: formulas, functions and cell referencing throughout the project. Part 1. Using the information above prepare, in good form, a GAAP (accrual basis) income statement. determine net income (loss) and compute the break-even point in total sales dollars and in units for 2022. Prepare a CVP income statement format for Part 2 (plans A and B). Part 2. PLAN A-Lorna has proposed a plan to improve its profitability. Lorna feels that the quality of the final product could be substantially improved by spending $0.23 more per unit on higher quality raw materials. The selling price per unit could be increased to $7.35. Lorna projects that sales volume will increase by 22% Compute net income under Lorna's proposal and the break even point in units and sales dollars MacBook Air 22%. Compute net income under Lorna's proposal and the break-even point in units and sales dollars. (DO NOT Round the contribution margin ratio.) PLAN B - Anh was a sales and marketing major in college. Anh believes sales volume can be increased by using an intensive online advertising and social media promotional campaign. She proposed the following plan as an alternative to Lorna's: (1) improve sales incentives by increasing sales commission for each sale, this will increase the following variable costs: cost of goods sold to $3.16/per unit, selling expenses to $0.85/per unit, administrative expenses to $0.55/per units, (2) increase the selling price per unit by $0.57, and (3) increase fixed selling expenses by $45,840. Anh based her recommendations on a marketing research report that suggested that sales volume would increase by 21% if these changes were made. Compute net income under Anh's proposal and the break-even point in unit and sales dollars. (DO NOT Round the contribution margin ratio.) Part 3. Which plan do you believe should be accepted and why? Using good written communication, completely. and thoroughly explain your answer. Your score for this category will be based significantly on your persuasiveness and effectiveness to "sell" your conclusion to executives in the company. Managerial Accounting Analysis Rubric 2Rubric (2) Criteria Accurate Solutions Calculations are accurate. using formulas in the spreadsheet. Written Analysis at the 60 to 30.0 pts Meets Expectations Evaluation based upon the extent to which formulas were used and the accuracy of the results. 20 to 15.0 pts Eurende Expectations Ratings 15 to 10.0 pts 30 to 0 pts Below Expectations If formulas are not used in the spreadsheet and/or calculations and results are not accurate. 10 to 0 pts Balans Eenectations Pts 60 pts Part 3. Which plan do you believe should be accepted and why? Using good written communication, completely and thoroughly explain your answer. Your score for this category will be based significantly on your persuasiveness and effectiveness to "sell" your conclusion to executives in the company. Managerial Accounting Analysis Rubric 2Rubric (2) Criteria Accurate Solutions Calculations are accurate using formulas in the spreadsheet. Written Analysis This will evaluate the written solutions provided. by the submission- accuracy, thoughtfulness of answers, supported conclusion, effective written communication. Format and Presentation This will evaluate the professionalism of the submission, Format. presentation and complete. 60 to >30.0 pts Meets Expectations Evaluation based upon the extent to which formulas were used and the accuracy of the results. 20 to 15.0 pts Exceeds Expectations Submission is very well written, clear and concise thoughts/ideas. Creative solutions, Well supported supported and accurate answers, Ratings 20 to >10.0 pts Meets Expectations Format and presentation of the project meets or exceeds expectations. 30 to 0 pts Below Expectations If formulas are not used in the spreadsheet and/or calculations and results are not accurate. 15 to 10.0 pts Meets Expectations Submission provides; adequate answers to all questions but does not elaborate on answers, provides effective or creative thoughts/ideas that are reasonable or well supported. 10 to 0 pts Below Expectations Below expectations ratings would result from inaccurate answers, not complete answers, poor spelling/grammar/written communication, Incomplete answers. 10 to 0 pts Below Expectations Organization and presentation of the data/tables, and written answers are average or below average. Pts 60 pts 20 pts 20 pts Total Points: 100
Expert Answer:
Answer rating: 100% (QA)
Part 1 Income Statement GAAP Income Statement 2022 Sales Revenue 1578500 Cost of Goods Sold 1014750 Gross Profit 563750 Selling Expenses 410000 Administrative Expenses 189300 Total Operating Expenses ... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Suppose that a firm is producing in the short run with output given by: Q = 200.5L 2.5L 2 , The firm hires labor at a wage of $25 per hour and sells the good in a competitive market at P = $50 per...
-
Mayaguez Corporation provides its officers with bonuses based on net income. For 2010, the bonuses total $350,000 and are paid on February 15, 2011. Prepare Mayaguezs December 31, 2010, adjusting...
-
Consider the fuel consumption data given in Table B.18. The automotive engineer believes that the initial boiling point of the fuel controls the fuel consumption. Perform a thorough analysis of these...
-
The primary purpose of using a certification authority in electronic commerce is to: a. Ensure both the vendor and customer choose secure private keys b. Provide a banking facility for both the...
-
Identify the types of nonexchange revenues that are most likely to result in differences in the timing of recognition between the accrual and modified accrual bases of accounting.
-
Estimate the terminal value and the present value of equity, re=15% t+1 t+2 t+3 t+4
-
First Solar, Inc., adopted the new revenue recognition standard, ASC Topic 606, in 2017. The following are condensed versions of First Solars balance sheet, income statement, and cash flow statement,...
-
An electron (m = 9.1 10-31 kg, q = -1.6 10-19 C) starts from rest at point A and has a speed of 5.0 x 106 m/s at point B. Only electric forces act on it during this motion. Determine the electric...
-
Is it more important for a sport manager to be efficient or effective? Can you be both?
-
Do you think that all sport organizations should use TQM? Why or why not?
-
Do most sport organizations focus on creating customer value? Use specific examples to defend your position.
-
Do you believe that sport management theory is or should be as precise as physics or chemistry? Explain your answer.
-
For the companies you listed in question 6, identify their methods of going global.
-
We have given 5 students aptitude test marks and their statistically computed grades below. Marks Grade 85 Student 1 95 2 85 95 3 80 70 4 70 65 5 60 70 (i) (ii) [Points 20] We are interested to...
-
The age-old saying for investing is "buy low and sell high," but this is easier said than done. Investors who panic about falling prices sell their investments, which in turn lowers the price and...
-
Exhibit 6.18 presents selected financial statement data for Enron Corporation as originally reported for 1997, 1998, 1999, and 2000. In 2001, Enron restated its financial statements for earlier years...
-
May Department Stores (May) operates retail department store chains throughout the United States. At the end of Year 12, May reports debt of $4,658 million and common shareholders equity at book...
-
Given the following information, compute December 31, 2017, projected benefit obligation (PBO) and fair market value (FMV) of plan assets for Lee Company. What amount of asset or liability will be...
-
If total monthly fixed costs for a company were plotted on a graph for seven months, would the line drawn between the plotted points be parallel to the base or sloped? Explain why.
-
What is the simplest way to verify the accuracy of a breakeven calculation?
-
How is the contribution margin per unit used?
Study smarter with the SolutionInn App