Problem $11$: Introduction Managerial $-$ Cost Classification and Cost Behavior

Heritage Company manufactures and sells desk sets with a wholesale price of $$275.$ The company has sold approximately $4,000$ desk sets in the previous and current year, but has the capacity to make more without adding another shift. Annual costs associated with making $4,000$ desks:

$\backslash$table$[[$Wood$,$ glass, brass, other materials,$$,430,000],[$General office salaries,$$,110,000],[$Factory supervision,$$,70,000],[$Sales commissions,$$,60,000],[$Depreciation$,$ factory building,$$,105,000],[$Depreciation$,$ office equipment,$$,2,000],[$Indirect materials, factory,$$,18,000],[$Factory cutting and assembly labor,$$,90,000],[$Advertising$,$$$,100,000],[$Insurance$,$ factory,$$,6,000],[$General office billing supplies,$$,4,000],[$Property taxes, factory,$$,20,000],[$Utilities$,$ factory,$$,45,000]]$ REQUIREMENTS

A$.$ Develop an Excel spreadsheet that includes the content outlined below in items $1$ through $3---$ use solution example provided where item was assigned and discussed in class.

B$.$ The Excel Spreadsheet should be able to change variables for units produced and units sold:

a$.$ Base $-4000$ units produced and $4000$ units sold

b$.$ Change $1-4500$ units produced and $4,300$ units sold

c$.$ Change $2-4800$ units produced and $4,700$ units sold

The Spreadsheet should provide the following schedules and financial statements

$1.$ Basic Schedule of Cost of Goods Manufactured

$-$ DM

$-$ DL

$-$ MO

$-$ Total Manfacturing Costs

$-$ Total and Per Unit Cost Columns for each of the above.

$2.$ Balance Sheet $-$ Finished Goods Inventory Account only

$-$ # of units in FG Inventory

$-$ Total and Per Unit $ Amounts for FG Inventory

$3.$ Income Statement $-$ Contribution Approach

$-$ Sales

$-$ Less Variable Costs

$-=$ Contribution Margin

$-$ Fixed Costs

$-=$ Net Income

$-$ Total and Per Unit $Amounts for Sales, VC and CM

$-$ Total $ amounts for FC and NI