AC Project3 calculations

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Accounting

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Apr 3, 2024

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xlsx

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14-Mar-22 Standard Boxes Profit Maximization ( obtain Column C to H from Project 2) Price 5 $ 22.00 $ 110.00 $ 10.00 5.5 $ 21.60 $ 118.80 $ 10.00 6 $ 21.20 $ 127.20 $ 10.00 6.5 $ 20.80 $ 135.20 $ 10.00 7 $ 20.40 $ 142.80 $ 10.00 7.5 $ 20.00 $ 150.00 $ 10.00 8 $ 19.60 $ 156.80 $ 10.00 8.5 $ 19.20 $ 163.20 $ 10.00 9 $ 18.80 $ 169.20 $ 10.00 9.5 $ 18.40 $ 174.80 $ 10.00 10 $ 18.00 $ 180.00 $ 10.00 10.5 $ 17.60 $ 184.80 $ 10.00 11 $ 17.20 $ 189.20 $ 10.00 11.5 $ 16.80 $ 193.20 $ 10.00 12 $ 16.40 $ 196.80 $ 10.00 12.5 $ 16.00 $ 200.00 $ 10.00 13 $ 15.60 $ 202.80 $ 10.00 13.5 $ 15.20 $ 205.20 $ 10.00 14 $ 14.80 $ 207.20 $ 10.00 Deluxe Boxes Profit Maximization ( Columns C to H obtain from Project 2) Price 1 $ 30.00 $ 30.00 $ 20.00 1.2 $ 29.50 $ 35.40 $ 20.00 1.35 $ 29.00 $ 39.15 $ 20.00 1.5 $ 28.50 $ 42.75 $ 20.00 1.55 $ 28.00 $ 43.40 $ 20.00 1.6 $ 27.50 $ 44.00 $ 20.00 1.65 $ 27.00 $ 44.55 $ 20.00 1.7 $ 26.50 $ 45.05 $ 20.00 In Project 3 you will analyse managerial and costing information to improve the company's EBITD activity-based costing and cost-volume-profit analysis to make recommendations about LGI’s oper Step 1: Use the information you calculated in Project 2 Tab 3 Profit Maximization to populate ha Step 2: Assume the company operates for 12 months of the year convert the information you po to M for both the Standard and Deluxe Boxes. Step 3: Assume for this project that the only variable costs in this company are materials and lab Standard boxes sold per month (millions) Revenue (price x volume) Variable Cost per Standard box Deluxe boxes sold per month (millions) Revenue (price x volume) Variable Cost per Deluxe box
1.75 $ 26.00 $ 45.50 $ 20.00 1.8 $ 25.50 $ 45.90 $ 20.00 1.85 $ 25.00 $ 46.25 $ 20.00 1.9 $ 24.50 $ 46.55 $ 20.00 1.95 $ 24.00 $ 46.80 $ 20.00 2 $ 23.50 $ 47.00 $ 20.00 2.05 $ 23.00 $ 47.15 $ 20.00 2.1 $ 22.50 $ 47.25 $ 20.00 2.15 $ 22.00 $ 47.30 $ 20.00 2.2 $ 21.50 $ 47.30 $ 20.00 2.25 $ 21.00 $ 47.25 $ 20.00 Question 2 Standard Boxes Deluxe Boxes Total 9 1.5 10.5 108 18 126 $ (in millions) $ (in millions) $ (in millions) Revenue $ 2,030.40 $ 513.00 $ 2,543.40 $ 1,080.00 $ 360.00 $ 1,440.43 $ 950.40 $ 153.00 $ 1,103.40 $ 120.00 $ 36.00 $ 156.00 $ 830.40 $ 117.00 $ 947.40 40.90% 22.81% The Company currently operates by selling 9 Million Standard Boxes and 1.5 Million Deluxe Boxes The CEO is convinced that under the current cost allocation which allocates fixed costs on a lump s allocation basis) , Deluxe boxes is not contributing much to company profit and with recent threa should consider to no longer produce Deluxe Boxes. Required (place answers in the in the Grey Spaces provided) 1) Calculate how much operating profit each product makes? 2) Calculate the Operating Profit percentage (based on sales)for each product. HINT Use the annual information calculated in Question 1 to complete Question 2 Number of Boxes per month (in Millions) Number of Boxes per year (millions) Subtract : Variable Costs Equals : Contribution Margin Subtract : Fixed Costs Equals : Operating Profit Operating Profit % (based on revenue)
$ 50.00 $ 10.00 $ 60.00 $ 50.00 $ 1,320.00 $ 55.00 $ 10.00 $ 65.00 $ 53.80 $ 1,425.60 $ 60.00 $ 10.00 $ 70.00 $ 57.00 $ 1,526.40 $ 65.00 $ 10.00 $ 75.00 $ 60.20 $ 1,622.40 $ 70.00 $ 10.00 $ 80.00 $ 62.80 $ 1,713.60 $ 75.00 $ 10.00 $ 85.00 $ 65.00 $ 1,800.00 $ 80.00 $ 10.00 $ 90.00 $ 66.80 $ 1,881.60 $ 85.00 $ 10.00 $ 95.00 $ 68.20 $ 1,958.40 $ 90.00 $ 10.00 $ 100.00 $ 69.20 $ 2,030.40 $ 95.00 $ 10.00 $ 105.00 $ 69.80 $ 2,097.40 $ 100.00 $ 10.00 $ 110.00 $ 70.00 $ 2,160.00 $ 105.00 $ 10.00 $ 115.00 $ 69.80 $ 2,217.60 $ 110.00 $ 10.00 $ 120.00 $ 69.20 $ 2,270.40 $ 115.00 $ 10.00 $ 125.00 $ 68.20 $ 2,318.40 $ 120.00 $ 10.00 $ 130.00 $ 66.80 $ 2,361.60 $ 125.00 $ 10.00 $ 135.00 $ 65.00 $ 2,400.00 $ 130.00 $ 10.00 $ 140.00 $ 62.80 $ 2,433.60 $ 135.00 $ 10.00 $ 145.00 $ 60.20 $ 2,462.40 $ 140.00 $ 10.00 $ 150.00 $ 57.20 $ 2,486.40 $ 20.00 $ 3.00 $ 23.0000 $ 7.00 $ 360.00 $ 24.00 $ 3.00 $ 27.0000 $ 8.40 $ 424.80 $ 27.00 $ 3.00 $ 30.0000 $ 9.15 $ 513.00 $ 30.00 $ 3.00 $ 33.0000 $ 9.75 $ 520.80 $ 31.00 $ 3.00 $ 34.0000 $ 9.40 $ 528.00 $ 32.00 $ 3.00 $ 35.0000 $ 9.00 $ 534.60 $ 33.00 $ 3.00 $ 36.0000 $ 8.55 $ 540.60 $ 34.00 $ 3.00 $ 37.0000 $ 8.05 $ 546.00 DA. You will use what you have learned about cost behavior and apply rational productivity. as Columns C to H in Question 1. opulated in Columns C to H to annual information and populate Columns I bour. All other overhead costs will be assumed to be fixed. Variable Cost (cost per unit x volume) Fixed cost per month (millions) Total Cost (Fixed + Variable) Monthly Profit (revenue - all costs) Annual Revenue (millions) Variable Cost (cost per unit x volume) Fixed cost per month (millions) Total Cost (Fixed + Variable) Monthly Profit (revenue - all costs) Annual Revenue (millions)
$ 35.00 $ 3.00 $ 38.0000 $ 7.50 $ 550.00 $ 36.00 $ 3.00 $ 39.0000 $ 6.90 $ 555.00 $ 37.00 $ 3.00 $ 40.0000 $ 6.25 $ 558.00 $ 38.00 $ 3.00 $ 41.0000 $ 5.55 $ 561.60 $ 39.00 $ 3.00 $ 42.0000 $ 4.80 $ 564.00 $ 40.00 $ 3.00 $ 43.0000 $ 4.00 $ 565.80 $ 41.00 $ 3.00 $ 44.0000 $ 3.15 $ 567.00 $ 42.00 $ 3.00 $ 45.0000 $ 2.25 $ 567.60 $ 43.00 $ 3.00 $ 46.0000 $ 1.30 $ 567.60 $ 44.00 $ 3.00 $ 47.0000 $ 0.30 $ 567.60 $ 45.00 $ 3.00 $ 48.0000 $ (0.75) $ 567.60 s per month. sum method (arbitrarily using a monthly ats from environmental groups thinks that LGI
Annual information ( for 12 Months) Annual Profit $ 600.00 $ 120.00 $ 720.00 $ 600.00 $ 660.00 $ 120.00 $ 780.00 $ 645.60 $ 720.00 $ 120.00 $ 840.00 $ 686.40 $ 780.00 $ 120.00 $ 900.00 $ 722.40 $ 840.00 $ 120.00 $ 960.00 $ 753.60 $ 900.00 $ 120.00 $ 1,020.00 $ 780.00 $ 960.00 $ 120.00 $ 1,080.00 $ 801.60 $ 1,020.00 $ 120.00 $ 1,140.00 $ 818.40 $ 1,080.00 $ 120.00 $ 1,200.00 $ 830.40 $ 1,140.00 $ 120.00 $ 1,260.00 $ 837.60 $ 1,200.00 $ 120.00 $ 1,320.00 $ 840.00 $ 1,260.00 $ 120.00 $ 1,380.00 $ 837.60 $ 1,320.00 $ 120.00 $ 1,440.00 $ 830.40 $ 1,380.00 $ 120.00 $ 1,500.00 $ 818.40 $ 1,440.00 $ 120.00 $ 1,560.00 $ 801.60 $ 1,500.00 $ 120.00 $ 1,620.00 $ 780.00 $ 1,560.00 $ 120.00 $ 1,680.00 $ 753.60 $ 1,620.00 $ 120.00 $ 1,740.00 $ 722.40 $ 1,680.00 $ 120.00 $ 1,800.00 $ 686.40 Annual information ( for 12 Months) $ 120.00 $ 120.00 $ 240.00 $ 120.00 $ 144.00 $ 120.00 $ 264.00 $ 160.80 $ 162.00 $ 120.00 $ 282.00 $ 187.80 $ 180.00 $ 120.00 $ 300.00 $ 213.00 $ 186.00 $ 120.00 $ 306.00 $ 214.80 $ 192.00 $ 120.00 $ 312.00 $ 216.00 $ 198.00 $ 120.00 $ 318.00 $ 216.00 $ 204.00 $ 120.00 $ 324.00 $ 216.60 Annual VC (millions) Annual FC (millions) Annual Total Costs (millions) Annual VC (millions) Annual FC (millions) Annual Total Costs (millions) Annual Profit (millions)
$ 210.00 $ 120.00 $ 330.00 $ 216.60 $ 216.00 $ 120.00 $ 336.00 $ 214.80 $ 222.00 $ 120.00 $ 342.00 $ 213.00 $ 228.00 $ 120.00 $ 348.00 $ 210.00 $ 234.00 $ 120.00 $ 354.00 $ 207.60 $ 240.00 $ 120.00 $ 360.00 $ 204.00 $ 246.00 $ 120.00 $ 366.00 $ 199.80 $ 252.00 $ 120.00 $ 372.00 $ 195.00 $ 258.00 $ 120.00 $ 378.00 $ 189.60 $ 264.00 $ 120.00 $ 384.00 $ 183.60 $ 270.00 $ 120.00 $ 390.00 $ 177.00
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