ACC 550 Hampshire Company Spreadsheet

.xlsx
School
Southern New Hampshire University **We aren't endorsed by this school
Course
ACC 550
Subject
Finance
Date
Nov 5, 2023
Pages
13
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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 $ 295,525.00 $ 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 $ 750,000.00 $ 568,317
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 $ 78,000.00 Prior Income X XX% Above Total $ 172,475.00 Requirement 7 Targeted Income = (Fixed Costs + Target Income) / Contribution Margin Fixed Costs + Target Income Divided by Contribution Margin Fixed Costs $ 295,525.00 Target Income $ 120,000.00 Total $ 415,525.00 $ 6.50 # of Units Above X $ Per Unit Proof Revenue XX,XXX X $XX.XX Variable Costs XX,XXX X $X.XX Contribution Margin
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 $ 31,000 Contribution Margin $ 390,000 $ 24,000 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 The special order's net operating income is $103, Requirement 1 is $94,975. Hampshire Company sho because it results in an additional $9
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