ACC 550 Hampshire Company Spreadsheet

xlsx

School

Southern New Hampshire University *

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Course

550

Subject

Management

Date

Apr 3, 2024

Type

xlsx

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Uploaded by sherrybabe96

Requirement 1 Units Price Sales 60,000 $12.50 Variable Costs 60,000 $6.00 Fixed Costs Net Income Requirement 2 Contribution Margin per Unit in Dollars = Selling Price – Variable Costs Selling Price Variable Costs $12.50 $6.00 Contribution Margin Ratio = Contribution Margin/Selling Price Contribution Margin Selling Price $6.50 $12.50 Requirement 3 Break-Even Point = Fixed Costs / Contribution Margin Fixed Costs Contribution Margin $295,525 $6.50 Break-Even Point in Units X Selling Price per Unit = Break-Even Point Sales Break-Even Point in Units Selling Price per Unit 45,465 $12.50 Requirement 4A Margin of Safety in Units = Current Unit Sales – Break-Even Point in Unit Sales Current Unit Sales Break-Even Point in Sales 60,000 45,465 Requirement 4B Margin of Safety in Dollars = Current Sales in Dollars – Break-Even Point Sales in Dollars Current Sales in Dollars Break-Even Point in Dollars $750,000 $568,313

Requirement 4C Margin of Safety as a Percentage = Margin of Sales in Units / Current Unit Sales Margin of Safety in Units Current Unit Sales 14,535 60,000 Requirement 5 Degree of Operating Leverage = Contribution Margin / Operating Income Contribution Margin Operating Income $390,000.00 $94,475.00 Requirement 6 Units $ Per Unit Sales 72,000 $12.50 Variable Costs 72,000 $6.00 Fixed Costs Net Income Operating Leverage Times % Increase 4.13 20% Prior Income $94,475.00 From Part 1 Increase $78,036.35 Prior Income X XX% Above Total $172,511.35 Requirement 7 Targeted Income = (Fixed Costs + Target Income) / Contribution Margin Fixed Costs + Target Income Divided by Contribution Margin Fixed Costs $295,525 Target Income $120,000 Total $415,525 $6.50 # of Units Above X $ Per Unit Proof Revenue 63927*12.50 Variable Costs 63927*6.00 Contribution Marg63927*6.50

Fixed Costs Net Income Requirement 8 Sales Mix Current Specialty Expected Sales Units 60,000 5,000 Revenue = Sales X Price $750,000 $55,000 Variable Costs X Units $360,000 $6,500 Contribution Margin $390,000 $48,500 Fixed Costs $295,525 $15,000 Operating Income Prior Net Income From Requirement 1 Additional Operating Income (Operating Income Above Less Prior Income) Decision With Explanation Based on the calculations, we can see that Hapshire will have $33,500 additional in oper

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Totals $750,000 $360,000.00 $295,525.00 $94,475.00 Contribution Margin per Unit $6.50 Contribution Margin Ratio 52% Break-Even Point in Units (Rounded) 45,465 Break-Even Point in Sales (Rounded) $568,313 Margin of Safety in Units 14,535 s Margin of Safety in Dollars $181,687

Margin of Safety Percentage 24% Operating Leverage 4.1281 Totals $900,000 $432,000.00 $295,525.00 $172,475.00 Increase would be XX% 0.826 # of Units (Rounded) 63,927 $799,088 $383,562 $415,526

$295,525 $120,001 Total $805,000 $366,500 $438,500 $310,525 $127,975 $94,475.00 $33,500.00 rating income if they agree to sell the additional 5,000 umbrellas.

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Requirement 1 Hampshire Company Variable Costing Income Statement Units $ Sales 60,000 $12.50 750000 $ Variable Cost of Goods Sold: Beginning Inventory $0 Direct Materials 80,000 $3.00 $240,000.00 Direct Labor 80,000 $1.50 $120,000.00 Manufacturing Overhead 80,000 $0.40 $32,000.00 Total Variable Costs $4.90 $392,000.00 Cost of Good Available for Sale $392,000.00 Deduct Ending Inventory 20,000 $4.90 $98,000.00 Variable Costs of Goods Sold $294,000.00 Variable Selling Costs 60,000 $1.10 $ $66,000.00 Contribution Margin $390,000.00 Fixed Costs: Fixed Manufacturing Costs $216,000 Fixed Administrative Costs $79,525 Operating Income $94,475.00 Requirement 2 Hampshire Company Absorption Costing Income Statement Units $ Sales 60,000 $12.50 750000 $ Variable Cost of Goods Sold: Beginning Inventory $0 Direct Materials 80,000 $3.00 $240,000.00 Direct Labor 80,000 $1.50 $120,000.00 Manufacturing Overhead 80,000 $0.40 $32,000.00 Total Variable Costs $392,000.00 Allocated Fixed Manufacturing Costs 80,000 $2.70 $216,000.00 Cost of Good Available for Sale $608,000.00 Deduct Ending Inventory 20,000 $7.60 $152,000.00 Costs of Goods Sold $456,000.00 Gross Margin $294,000.00 Fixed Costs:

Variable Selling Costs 60,000 $1.10 $66,000 Fixed Administrative Costs $79,525 Operating Income $148,475.00

Requirement 1 Price Variances: (Actual Price – Standard Price) X Actual Quantity Actual Standard Actual Quantity Variance Favorable or Unfavora Cloth $1.25 $1.15 128,000 $12,800 Unfavorable Handle Assembly $0.99 $1.05 80,808 $4,848 Favorable Labor Price Variance $7.62 $7.05 15,748 $8,976 Unfavorable Requirement 2 Efficiency Variances: (Actual Quantity of Input Used – Standard Quantity of Input Allowed for Actual Output) X Budgeted Price o Actual Standard Standard Price Variance Favorable or Unfavora Cloth 128,000 120,000 $1.15 $9,200 Unfavorable (1.5 Yards per Unit) Handle Assembly 80,808 80,000 $1.05 $848 Unfavorable (1 per Unit) Labor 15,748 16,000 $7.05 -$1,777 Favorable (.20 per Unit)

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able of Input able

Cost Information From Instructions Stick Collapsible Units Sold 60,000 3,000 Selling Price $12.50 $14.00 Direct Material Cost Per Unit $3.00 $3.10 Direct Labor Cost Per Hour $7.50 $8.00 Variable MO $0.40 $0.40 Variable Selling Costs $1.10 $1.10 Labor Hours Per Unit 0.2 0.2 Sales Orders 120 1 Purchase Orders 50 3 Production Runs 45 6 Material Moves 86 10 Machine Setups 130 6 Machine Hours 525 32 Inspections 200 10 Shipments 60 3 Activity Information from Instructions Activity Activity Cost Activity Cost Driver Order Processing $35,000 Number of Sales Orders Purchasing $36,000 Number of Purchase Orders Material Handing $28,000 Material Moves Machine Setup $14,000 Machine Setups Production $99,000 Production Runs Assembly $80,000 Machine Hours Inspecting $11,000 Number of Inspections Shipping $7,500 Number of Shipments Requirement 1 Activity Total Costs Order Processing $35,000 121 $289 Purchasing $36,000 53 $679 Material Handing $28,000 96 $292 Machine Setup $14,000 136 $103 Production $99,000 51 $1,941 Assembly $80,000 557 $144 Inspecting $11,000 210 $52 Shipping $7,500 63 $119 Requirement 2 Traditional Costing Stick Umbrella Collapsible Umbrella Total Revenues $750,000 $42,000 $792,000 Quantity of Cost Allocation Base Overhead Allocation Rate

Direct Materials $180,000 $9,300 $189,300 Direct Labor $90,000 $4,800 $94,800 Variable Overhead $24,000 $1,200 $25,200 Variable Selling Costs $66,000 $3,300 $69,300 Allocated Fixed Overhead $295,200 $14,760 $309,960 Total Costs $655,200 $33,360 $688,560 Operating Income $94,800 $8,640 $103,440 Operating Income % 13% 21% Per Unit Operating Income $1.58 $2.88 Requirement 3 Activity-Based Costing Stick Umbrella Collapsible Umbrella Total Revenues $750,000 $42,000 $792,000 Direct Materials $180,000 $9,300 $189,300 Direct Labor $90,000 $4,800 $94,800 Variable Overhead $24,000 $1,200 $25,200 Variable Selling Costs $66,000 $3,300 $69,300 Order Processing Costs $34,711 $289 $35,000 Purchasing Costs $33,962 $2,038 $36,000 Material Handing Costs $25,083 $2,917 $28,000 Machine Setup Costs $13,382 $618 $14,000 Production Costs $87,353 $11,647 $99,000 Assembly Costs $75,404 $4,596 $80,000 Inspecting Costs $10,476 $524 $11,000 Shipping Costs $7,143 $357 $7,500 Total Costs $647,514 $41,586 $689,100 Operating Income $102,486 $414 $102,900 Operating Income % 14% 1% Per Unit Operating Income $1.71 $0.14 Requirement 4 Costs per Unit Stick Umbrella Collapsible Umbrella Traditional $1.58 $2.88 ABC $1.71 $0.14 Difference -$0.13 $2.74

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ACC 550 Hampshire Company Spreadsheet

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