MODULE 4 (Budget) Quiz Solve for the following problem. YOUR NAME(S): Fiona's Florist is a wholesale distributor of fresh flowers to variety and grocery stores Fiona's Florist has two product lines: Blooms and Flower Arrangements. 0 Using her operating statement for the second quarter and the additional information below, create a Product Budget for each of her product lines. A single unit for Blooms is equal to a dozen flowers. A single unit for Arrangements is one arrangement. Fiona's Florist operating statement Sales Revenue $360,000 Cost of Goods Sold $180,000 Gross Margin $180,000 Less: Operating Expenses 19 Salaries $ 30,000 Depreciation $ 9,000 Advertising & Promo $ 6,000 Operating Expense $ 45,000 .3 Operating Income $135,000 25 12,000 units were sold in the quarter. Of these 10,000 were Blooms and 2,000 were arrangements. . The average price for Blooms is $27 and for Arrangements is 545 28 . The Cost of Blooms is $14 for a unit and for Arrangements is 30 31 The objective of this exercise is breakdown Lush Lawn's Pro Forma Operating Statement into 32 statements for each of its product lines. This allows the company to see what is contributing 83 to their profits and to control expenses better. 34 15 It helps to begin by writing out the accounts for the operating statement and to make a 36 column for each of the product lines and the total company. 370 1 The objective of this exercise is breakdown Lush Lawn's Pro Forma Operating Statement into statements for each of its product lines. This allows the company to see what is contributing to their profits and to control expenses better. Use shaded 5 It helps to begin by writing out the accounts for the operating statement and to make a 6 column for each of the product lines and the total company. Total Blooms Arrangements Salaries Driver 0 Sales Revenue 360,000 1 Cost of Goods Sold CA CA CA 180,000 Product Lines Driver % Allocation 2 Gross Margin 180,000 Blooms 3 Less Operating Expenses: Arrangements 4 Salaries 30,000 Depreciation 9,000 6 Advertising & Promotion 6,000 Depreciation Total Operating Expense Driver 8 Operating Income (Margin) Product Lines Driver % Allocation 0 Profit margin on Sales Blooms Use one decimal place with % and no decimal places with $. Arrangements #1. Consider the income statement line by line, start by calculating Sales Revenue for each product line. Advertising & Promotions #2. Given units and price for each product line Driver 6 determine Sales Revenue and COGS for each product line. #3. Allocate Salaries, Depreciation and Advertising, using the stated drivers (cell referencing Product Lines Driver % Allocation 8 where appropriate) and determine the Operating Margin and Profit Margin. Blooms Arrangements