Complete the assigned problems in Microsoft Excel

Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60.000 units. consist- Problem 7-38 ing of 39.000 Deluxe units and 21.000 Basic units. Selling price and variable cost information follow. Sales Mix and Employee Compensation: Operating Changes Delic Basic LO 74. 7 51 selling price ST4 Vanable cost Salespeople currently receive flat salaries that total $400.000. Management is contemplating a change to a compensation plan that is based on commissions in an effort to boost the company's presence in the marketplace. Two plans are under consideration: Plan A: 10% commission computed on gross dollar sales. Deluxe sales are expected to total 45.500 units: Basic sales are anticipated to be 19.500 units, Plan B: 30% commission computed on the basis of production contribution margins. Deluxe sales are anticipated to be 26.000 units; Basic sales are expected to total 39.000 units. Required: 1. Define the term sales mix. Comparing Plan A to the current compensation arrangement: Will Plan A achieve management's objective of an increased presence in the marketplace? Briefly explain. From a sales-mix perspective. will the salespeople be promoting the product that one would logically expect? Briefly discuss. Will the sales force likely be satisfied with the results of Plan A? Why? Will Lawrence likely be satisfied with the resulting impact of Plan A on company profitability? Why ? 320 Chapter 7 Cost Volume-Profit Analysis Assume that Plan B is under consideration a. Compare Plan A and Plan B Will respect to total units sold and the sales mix, Comment on the results. In comparison with fat salar is Plan B more attractive to the sales force? To the company Show calculations to support your answers.Problem 7-35 Basic CVP Computations CollegePak Company produced and sold 60.000 backpacks during the year just ended at an average (LO 7-1, 7-2. 7-4) price of $20 per unit. Variable manufacturing costs were $8 per unit, and variable marketing costs were $4 per unit sold. Fixed costs amounted to $180.000 for manufacturing and $72.000 for marketing. There 2. Sales units required for was no year-end work-in-process inventory. (Ignore income taxes!) $180 000 income: 54 000 Required: 1. Compute CollegePak's break-even point in sales dollars for the year. 2. Compute the number of sales units required to earn a net income of $180.000 during the year. 3. CollegePak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm's break-even point in sales dollars for the coming year. 4. If CollegePak's variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year.Problem 7-37 Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The follow- CVP Analysis: Impact of ing data relate to the period just ended when the company produced and sold 42,000 speaker sets: Operating Changes Sales S3 360,000 Variable costs 840 000 FoEd Costs 7 280,000 Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $18 per set: annual fixed costs are anticipated to be $1,984,000. In the following requirements. ignore income taxes.) Required: 1. Calculate the company's current income and determine the level of dollar sales needed to double that figure. assuming that manufacturing operations remain in the United States. 2. Determine the break-even point in speaker sets if operations are shifted to Mexico. 3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States. If variable costs remain constant. what must management do to fixed costs? By how much must fixed costs change? If fixed costs remain constant. what must management do to the variable cost per unit? By how much must unit variable cost change? Determine the impact (increase, decrease, or no effect) of the following operating changes. Effect of an increase in direct material costs on the break-even point. Effect of an increase in fixed administrative costs on the unit contribution margin. C. Effect of an increase in the unit contribution margin on net income d. Effect of a decrease in the number of units sold on the break-even point