hello. Can you help explain this in an excel spreadsheet.

Citrus company buys a variety of citrus fruit from growers and then processes the fruit into a product line

of fresh fruit, juices, and fruit flavorings.

Current cost structure:

Current annual sales revenue

$3,000,000

Current Variable costs

40%

of Sales

Current Fixed costs totaled

$750,000

Required:Answer the following questions below the question and use cell references to make your computations.

1. What is the current contribution margin ratio?

2. What is the current break-even point in sales dollars?

3. Determine the margin of safety in sales dollars.

4. Prepare a Contribution margin income statement for the current sales.

Sales

Less Variable costs

Contribution margin

Less Fixed costs

Profit

5. Compute the degree of operating leverage.

6. If sales can increase by:

10%

of current sales level

What would be the percentage increase in profit?

7. Prepare a Contribution Margin income statement if sales increase 10% above current sales level.

Sales

Less Variable costs

Contribution margin

Less Fixed costs

Profit

8. Proof the change in profit if there is an increase of 10% of sales revenue compared to the original profit.

Your answer should agree with the answer in #6 and this proofing should calculate the change in profit from #7 and 4 divided by the profit of #4.

Citrus company is evaluating 2 independent strategies designed to enhance profitability. You need to refer to the original cost structure to evaluate these two independent strategies as outlined in #9 and #10.

9. Strategy #1. This strategy is to purchase more automated processing equipment.

This strategy would increase fixed costs by

$100,000

This strategy would decrease variable costs to

25%

of sales

What is the break-even point in sales dollars for strategy #1?

Prepare an updated Contribution margin income statement based on strategy #1 at the current sales level.

Sales

Less Variable costs

Contribution margin

Less Fixed costs

Profit

10. Strategy #2. This strategy is to outsource the fruit processing.

This strategy would reduce fixed costs by

$150,000

This strategy would decrease variable costs to

35%

of sales

What is the break-even point in sales dollars for strategy #2?

Prepare an updated Contribution margin income statement based on strategy #2 at the current sales level.

Sales

Less Variable costs

Contribution margin

Less Fixed costs

Profit

11. Describe one strength and one weakness for each of the strategies. Recommend

to management which strategy you would recommend and why? You need to provide a detailed response to earn credit.