Using your budgeted income statement for the year, answer the following questions at the bottom of your income statement sheet You should use operating income in your calculations, not income before tax Label your answers, but make sure that your answers contain formulas incorporating cell references What is the budgeted break even point in units (Round to the nearest whole unit) What is the margin of safety percentage at the budgeted activity level for the year (Round to the nearest one percent) What is operating leverage at the budgeted activity level for the year (Round to one decimal place) If Crossley wants to earn a $5,500,000 operating profit next year, how many units must the company sell (Round to the nearest whole unit) A budgeted income statement QTR 1 QTR 2 QTR 3 QTR 4 YEAR Sales revenue 8568000 12852000 14994000 6426000 42840000 LESS Variable costs Direct materials 2040000 3060000 3570000 1530000 10200000 Direct labor 2347920 3559880 3635280 1751544 11294624 Variable overhead 1565280 2239920 2423520 1167696 7396416 Variable selling 299880 449820 524790 224910 1499400 Total variable costs 6253080 9309620 10153590 4674150 30390440 Contribution margin 2314920 3542380 4840410 1751850 12449560 LESS Fixed costs Fixed overhead depreciation 90000 90000 122500 122500 425000 Fixed overhead other 524000 524000 524000 524000 2096000 Fixed selling depreciation 75000 75000 75000 75000 300000 Fixed selling other 850000 850000 850000 850000 3400000 Fixed admin depreciation 120000 120000 120000 120000 480000 Fixed admin other 980000 980000 980000 980000 3920000 Total fixed costs 2639000 2639000 2671500 2671500 10621000 Operating income 324080 903380 2168910 919650 1828560 Less Interest Expense Profit before taxes 324080 903380 2168910 919650 1828560 Working Direct Material cost QTR 1 QTR 2 QTR 3 QTR 4 YEAR Budgeted sales units 40800 61200 71400 30600 204000 x Std Feet per unit 10 10 10 10 10 x $5 per feet 5 5 5 5 5 Direct Material cost 2040000 3060000 3570000 1530000 10200000

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Question: Using your budgeted income statement for the year, answer the following questions at the bottom of your income statement sheet. You should use operating income

Using your budgeted income statement for the year, answer the following questions at the bottom of your income statement sheet. You should use operating income in your calculations, not income before tax. Label your answers, but make sure that your answers contain formulas incorporating cell references.

What is the budgeted break-even point in units? (Round to the nearest whole unit)
What is the margin of safety percentage at the budgeted activity level for the year? (Round to the nearest one percent)
What is operating leverage at the budgeted activity level for the year? (Round to one decimal place)
If Crossley wants to earn a $5,500,000 operating profit next year, how many units must the company sell? (Round to the nearest whole unit)


A budgeted income statement
	QTR 1	QTR 2	QTR 3	QTR 4	YEAR
Sales revenue	8568000	12852000	14994000	6426000	42840000
LESS: Variable costs
Direct materials	2040000	3060000	3570000	1530000	10200000
Direct labor	2347920	3559880	3635280	1751544	11294624
Variable overhead	1565280	2239920	2423520	1167696	7396416
Variable selling	299880	449820	524790	224910	1499400
Total variable costs	6253080	9309620	10153590	4674150	30390440
Contribution margin	2314920	3542380	4840410	1751850	12449560
LESS: Fixed costs
Fixed overhead-depreciation	90000	90000	122500	122500	425000
Fixed overhead-other	524000	524000	524000	524000	2096000
Fixed selling-depreciation	75000	75000	75000	75000	300000
Fixed selling-other	850000	850000	850000	850000	3400000
Fixed admin-depreciation	120000	120000	120000	120000	480000
Fixed admin-other	980000	980000	980000	980000	3920000
Total fixed costs	2639000	2639000	2671500	2671500	10621000
Operating income	-324080	903380	2168910	-919650	1828560
Less : Interest Expense
Profit before taxes	-324080	903380	2168910	-919650	1828560

Working
Direct Material cost
	QTR 1	QTR 2	QTR 3	QTR 4	YEAR
Budgeted sales units	40800	61200	71400	30600	204000
x Std Feet per unit	10	10	10	10	10
x $5 per feet	5	5	5	5	5
Direct Material cost	2040000	3060000	3570000	1530000	10200000

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