ACCT 210 Excel CVP and Incremental Analysis Case Study - F23 (AutoRecovered)
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ACCT 210 Cost-Volume-Profit & Incremental Analysis Case Study
10 Total Points
Name
Maddy Raker Name
Learning Objectives:
• Apply Cost-Volume-Profit and Incremental Analysis to a business case.
• Practice basic Excel skills such as cell referencing and formula generation.
Instructions:
Grading Rubric:
8 of the 10 possible points will be awarded through the "Excel Case Study Submission Quiz" in D2L.
2 of the 10 possible points will be awarded based on your use of formulas and cell references in this w
Read the case study details on the
"Case Study" tab and complete the questions on the "Part 1"
an
tabs. When preparing the analysis on these two tabs, please use formulas and cell references as muc
possible (rather than typing numbers into the cells). After you have completed the "Part 1"
and "Part
will complete the "Excel Case Study Submission Quiz"
in D2L to record your answers. After submit
D2L quiz, please upload this completed Excel workbook to the assignment dropbox folder on D2L. On
from your team needs to submit the workbook. Please make sure that both of your names are of the Excel workbook.
2 pts = at least 10 cell references and formulas used throughout the workbook. 1 pt = fewer than 10 cell references and formulas used. 0 pts = no formulas or cell references used.
y
workbook. nd "Part 2" ch as t 2"
tabs, you tting your nly 1 person on this page
Case Study Details
Child’s Play Company
Sales Price (Current)
$ 15.00 per rattle
Units Sold (Current)
Sales Price (Proposed)
$ 14.00 per rattle
Units Sold (Proposed)
2023 Cost Data and Estimated 2024 Cost Data
Manufacturing Costs for rattles (based on production volume of 100,000 units):
Per Unit Costs
Total Costs
Expected Increase
Direct Materials
$ 1.60 Direct Labor
$ 1.80 Packaging
$ 0.25 Variable Manufacturing Overhead
$ 1.20 Fixed Manufacturing Overhead
$ 360,000 $ 20,000 per machi
Selling and Administrative Costs for rattles (based on sales volume of 100,000 units):
Per Unit Costs
Total Costs
Expected Increase
Sales Commissions
$ 1.50 Shipping Costs
$ 0.75 Advertising and Promotion (fixed)
$ 90,000 $ 2,000 total
Fixed Selling and Admin Expenses
$ 150,000 Child’s Play Company makes a plastic rattle for toddlers. The rattle is generally marketed through exc
in upscale shopping malls. In late 2023, Diana Suarez, the president of the company, was considering
marketing plan for 2024 that was presented to her by Bill Duffy, the marketing manager. Based on sa
through October 2023, Diana expected that 2024 sales would amount to 100,000 units. Bill’s alternati
presented below:
2024 Marketing Plan:
“At the present time, we sell the product to retailers for $15.00 per rattle. Reta
the consumers between $16 and $16.50. If we cut our selling price to retailers to $14.00, I expect that
much better. The retailers' increased markup will give them the incentive to display our product more promote it more vigorously to customers. We should support this strategy by supplying more promotio
retailers, which I expect would be an increase of $2,000 in Advertising and Promotion costs. Based on
increase in advertising and promotion, I expect that we will be able to boost our sales volume by 20 p
in 2024.”
Diana received cost data from the company’s CFO, Don Capp. Don expects that the cost data below estimates for 2024 for a production volume up to 150,000 units. Beyond 150,000 units, the company w
additional machines (with a capacity of 50,000 units each), which would increase fixed manufacturing
$20,000 per machine.
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100,000 120,000 ine
clusive retailers located g an alternative ales from January ive marketing plan is ailers generally charge t the product will do prominently and to onal materials to n the price cut and the percent to 120,000 units are also reliable would have to rent g overhead costs by
Part 1
Child's Play Company
CVP Income Statement
For the Year Ended December 31, 2023
Total
Per Unit
Sales $ 1,500,000 $ Variable Costs $ 710,000 $ Contribution Margin $ 790,000 $ Fixed Costs
$ 600,000 Net Income $ 190,000 Current Unit Cm
$ 7.90 Current BEP/Units $ 600,000 =
75949 units
$ 7.90 Child's Play Company
CVP Income Statement
For the Year Ended December 31, 2024
Total
Per Unit
Sales $ 1,680,000 $ Variable Costs
$ 852,000 $ Contribution Margin
$ 828,000 $ Using the information on the "Case Study" tab, answer the following questions. Include all costs (
administrative costs) in your calculations.
1.
Prepare a CVP Income Statement for 2023
using the current production and sales volume data, assuming no changes to selling price or costs.
2.
Determine the number of rattles the company would need to sell in 2023
in order to break-e
price or costs
. Please show your work and round to the nearest next whole unit.
3.
Assuming the selling price and cost changes in the Marketing Plan
are adopted, prepare a
assuming sales and production increase by 20% as outlined in the Marketing Plan.
Fixed Costs $ 602,000 New Net Income $ 226,000 Proposed Cm/Unit
$ 6.90 New BEP/unit
$ 602,000 =
87246
$ 6.90 $ 602,000 +
300,000
=
$ 902,000 $ 6.90 =
$ 130,725 units sold to ea
4.
Assuming the selling price and cost changes in the Marketing Plan
are adopted, determin
would need to sell in 2024
in order to break-even
. Please show your work and round to the ne
5.
Assuming the selling price and cost changes in the Marketing Plan
are adopted, determin
would need to sell in 2024
in order to earn $300,000 in profit
.
Please show your work and rou
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15.00 7.10 7.90 14.00 7.10 6.90 (manufacturing costs and selling and (100,000 rattles) and the current cost even, assuming no changes to selling a CVP Income Statement for 2024
,
arn $300,000 profit
ne the number of rattles the company earest next whole unit.
ne the number of rattles the company und to the nearest next whole unit.
Part 2
# of Rattles Needed by Gov.
75,000 Sales Price Paid by Gov.
$ 9.00 per rattle
Increase in fixed costs from additional machine
$ 20,000 per machine
Sales
675000
FC
$ 620,000 20000
20000
Profit
$ 55,000 New NI
$ 245,000 55000
55000
Old NI
$ 190,000 Increase in NI
$ 55,000 Accept!
Child’s Play has been approached by the government, which is seeking to buy 75,000 rattles for i
proposed government contract states that the government would pay Child’s Play a price of $9.00
decides to accept this special order, they would avoid packaging costs for this contract as
and administrative costs.
The company’s capacity is limited to only 150,000 units. If they accep
will need to increase their capacity by renting an additional machine. Refer to the "Instructions" ta
cost data and additional machine rental cost.
Assume that Child’s Play does not adopt the proposed Marketing Plan and that the company’s p
without the government contract is expected to be 100,000 rattles for 2024. 1.
What is the increase or (decrease) in Net Income that Child’s Play would recognize if they a
2. Based on your above analysis, should Child’s Play accept or reject the government contrac
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its day care centers in 2024. The 0 per rattle. If Child’s Play s well as all variable selling pt the government contract, they ab for the company’s estimated production and sales level accept this special order? ct?
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- blem Set: ModX * CengageNOWv2 | On x * Cengage Learning B Milestone Two Guidel x G module 5 problem set X ow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=. Lo еВook Show Me How Entries for notes payable Bennett Enterprises issues a $660,000, 45-day, 9%, note to Spectrum Industries for merchandise inventory. Assume a 360-day year. If required, round your answers to the nearest dollar.If an amount box does not require an entry, leave it blank. a. Journalize Bennett Enterprises' entries to record: 1. the issuance of the note. 2. the payment of the note at maturity. 2 b. Journalize Spectrum Industries' entries to record: 1. the receipt of the note. 2. the receipt of the payment of the note at maturity. Previous Check My Work 56°F Mostly cloudy ヘ 回。arrow_forwardSOUTH EAST-ASIA INSTITUTE OF TRADE AND TECHNOL0GY LL LEARNING MODULE FOR 1 SEMESTER GRADE 12 BUSINESS FINANCE STUDENT'S NAME: STRAND & SECTION: PART 4: ACTIVITY/APPLICATION Suppose: The following income Statements and Cash Flow Statements of company A, B and C were presented to you. Which do you think is a more attractive company? Why? O STAED rasoplastarrow_forwardNonearrow_forward
- TASK DESCRIPTION This assignment is comprised of two discrete tasks that each align with one of the learning outcomes described above. One is an informal report based on a five-year evaluation of the financial management and performance of a London Stock Exchange (LSE) FTSE 100 listed company. This report relates to learning outcome one. The second task, covering learning outcome two, is an essay on a particular aspect of financial-decision making and the main issues and theoretical frameworks related to the topic. Task one (Informal business report) Students are required to choose a public listed company from a given list of familiar United Kingdom (UK) firms whose shares are traded on the London Stock Exchange's FTSE 100 index, download its most recent annual report(s) covering financial statements for the past five years, and from the data presented produce an informal report of approximately 3,000 words which includes a critical overall analysis of its financial performance over…arrow_forward> A Blackboard Learn A My Grades - ACCT-1170-017-F X | + 1 U CA k 个 N = X myCT ctccs.blackboard.com/ultra/courses/_209880_1/cl/outline Λ P* ACCT-1170-017-Fall 2024-Principles of Managerial Accounting Question Completion Status: > QUESTION 1 Take Test: Unit 4 Homework Relaunch to update: Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead: Raw materials purchased $ 320,000 Raw materials, beginning inventory Raw materials, ending inventory 15,000 14,000 Work in process, beginning inventory 35,000 0 Work in process, ending inventory 37,000 Estimated overhead 300,000 Depreciation of factory building 50,000 Factory real estate taxes Factory utility expenses Indirect materials 7,382 45,000 20,000 Indirect labor Direct labor cost Direct labor hours incurred 11,000 100,000 24,000 Estimated direct labor hours 25,000 Compute the cost of goods manufactured. ہے Click Save and Submit to save and submit. Click Save All…arrow_forwardLearning SE MINDTAP evo/index.html?deploymentid=60338517901669990751687760&elSBN=9780357517642&nbld=3626933&snap... ☆ lomework 6300. 1 mancial Lailuialvi vi a spicoubnicel. Hide Feedback Correct X f6 Quantitative Problem 1: You plan to deposit $2,200 per year for 6 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. a. What amount will be in your account at the end of 6 years? Do not round intermediate calculations. Round your answer to the nearest cent. 4 b. Assume that your deposits will begin today. What amount will be in your account after 6 years? Do not round intermediate calculations. Round your answer to the nearest cent. 6 Hide Feedback Incorrect F Check My Work Feedback Review the FVAN definition and its equation. Q Search Understand the difference between an ordinary annuity and an annuity due. Be careful about the order of mathematical operations if using the equation. If using a financial calculator, be…arrow_forward
- Study Excel Instructio x EXAM 3-BUSI 320 class notes x b Login (bartieby es/155996/assignments/1958552 E Individual Differen... M Corporate Finance U SPAN101: Element... L Canvas Dashboard U Course Registration out # 4 Comp Prob - Ch 12 (D).docx I Downle Case Study # 4 Excel Submission – Capital Budgeting Comprehensive Problem Pinnacle Custom Home Builders purchased a 40 foot articulating boom lift three years ago for $50,000. The equipment has been depreciated under the 5-year MACRS schedule (20%, 32%, 19%, 12%, 12% & 5%). The old equipment can be sold for $33,000. Pinnacle is considering the purchase of a new 60 foot articulating boom lift that would allow the company to complete nearly all of its construction projects without the need for costly rental lifts. The new lift could be purchased for $105,000 and would also fall under the 5-year MACRS depreciation schedule. Assume the old and new equipment would provide the following operating gains (or losses) over the next six years.…arrow_forwardMake a textual information from this Enrollment by Key Stagearrow_forwardAssignment: Chapter 12 Homework Time Remaining: 0:58:20 Questions Problem 12.08 (New Project Analysis) 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 0 eBook Assignment Score: 78.57% Save Submit Assignment for Grading Question 4 of 14 ► Check My Work You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $140,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $32,000. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $43,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. a. What is the initial investment outlay for the spectrometer after bonus depreciation is considered, that is, what is the Year 0 project cash flow? Enter your answer as a positive value.…arrow_forward
- FA-22A Using ABC to bill clients at a service firm (Learning Objective 2) Kushner & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Kushner charges customers at a billing rate equal to 130% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($63 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Kushner allocates operating overhead to jobs based on professional hours spent on the job. Kushner estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and so forth) can be assigned to the three activities. Total activity costs, cost drivers, and total usage of those cost drivers are estimated as…arrow_forward6.2 Saving and Investing n.hawkeslearning.com/Portal/Lesson/lesson_practice# niversity X Question 9 of 13, Step 1 of 1 X - Save & Exit Practice Lesson: 6.2 Saving and Investing Lesson 6.2 Saving and Investin X Answer How to enter your answer (opens in new window) Ⓒ2024 Hawkes Learning $350 Your answer is incorrect. Please choose one of the following: Google Chrome - The Fast & Sex 3/13 Correct Lateral Flexion: What Is It and Molly starts an IRA (Individual Retirement Account) at the age of 28 to save for retirement. She deposits $350 each month. The IRA has an average annual interest rate of 7% compounded monthly. How much money will she have saved when she retires at the age of 65? Round your answer to the nearest cent, if necessary. X + GRANT GREENE Explain Error 5 Incorrect Formulas Keypad Keyboard Shortcuts Try Againarrow_forward* CengageNOWv2 | On x * Cengage Learning B Milestone Two Guidel G module 5 problem set x blem Set: Mod x now.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogres.. eBook Show Me How Proceeds from Notes Payable On January 26, Bella Co. borrowed cash from Conrad Bank by issuing a 30-day note with a face amount of $48,000. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note, assuming the note is discounted at 6%. Check My Work The proceeds equal the cash initially received. Proceeds represents how much in value the borrower is walking away with in cash on merchandise. Previous Next Check My Work 1:36 PM 54°F A O E A 4 11/28/2021 %23arrow_forward
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