Poleskiʼs controller would like to have the worksheet display an income statement in a contribution margin format (Sales – variable costs = contribution margin – fixed costs = net income). CVP Cost-Volume-Profit Analysis Data Section Fixed Variable Production costs Direct materials $2.30 Direct labor 4.70 Factory overhead $225,000 3.00 Selling expenses Sales salaries & commissions 97,000 0.75 Advertising 47,500 Miscellaneous selling expense 16,200 General expenses Office salaries 92,000 Supplies 12,300 0.25 Miscellaneous general expense 15,000 $505,000 $11.00 Projected unit sales 120,000 Selling price per unit $16.00 Target net income $250,000 Answer Section Contribution margin per unit $5.00 Contribution margin ratio 31.25% Break-even point in units 101,000 Units needed to achieve target net income 151,000 Break-even point in dollars $1,616,000 Sales dollars needed to achieve target net income $2,416,000 Net income based on projected unit sales (cell C22) $95,000

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter19: Variable Costing (varcost)

Section: Chapter Questions

Problem 4R: To determine the effect of different levels of production on the company’s income, move to cell B7...

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Poleskiʼs controller would like to have the worksheet display an income statement in a contribution margin format (Sales – variable costs = contribution margin – fixed costs = net income).


CVP
Cost-Volume-Profit Analysis

Data Section

	Fixed	Variable
Production costs
Direct materials		$2.30
Direct labor		4.70
Factory overhead	$225,000	3.00
Selling expenses
Sales salaries & commissions	97,000	0.75
Advertising	47,500
Miscellaneous selling expense	16,200
General expenses
Office salaries	92,000
Supplies	12,300	0.25
Miscellaneous general expense	15,000
	$505,000	$11.00

Projected unit sales		120,000
Selling price per unit		$16.00

Target net income		$250,000

Answer Section

Contribution margin per unit		$5.00
Contribution margin ratio		31.25%

Break-even point in units		101,000
Units needed to achieve target net income		151,000

Break-even point in dollars		$1,616,000
Sales dollars needed to achieve target net income		$2,416,000

Net income based on projected unit sales (cell C22)		$95,000

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