Part 1 Enter inputs and develop income statement report.

Create an input area on your spreadsheet. Enter the following:

Current Sales Volume (Units)	1,500
Variable Cost Per unit	$10.00
Sales Price Per Unit	$50.00
Fixed Costs	$40,000
Target Net Income Level	$50,000

Develop a Spreadsheet model to report the following:

Income Statement at Current Sales Level in a Contribution Margin Format

Income Statement at break-even point in a Contribution Margin Format

Income Statement at desired level of net income in a Contribution Margin Format. The Contribution Margin Income statement should include a per unit column and a percent column

The Income Statement Format should look like this:

	Per Unit	%	At Current Level	At Breakeven Level	At Target Net Income Level
Sales		100%
Variable Costs
Contribution Margin
Fixed Costs	Leave area blank
Net Income (loss)

The only absolute in the Income Statement is the sales percent is 100%

All other Data in the table is derived from formulas based on the inputs.

When the instructor changes the inputs, the income statement report should automatically change.

Part 2 Add to your spreadsheet formulas for the following statistics. Each statistic should be clearly labeled and the answer should be based on formulas from the inputs or from the income statement. When the instructor changes the inputs, the statistics should automatically change.

Margin of safety assuming the Company is operating at the Target net income level.

Break Even Point in Units

Degree of Operating Leverage Assuming the company is operating at the Target net income level.