Answered: On the Data Tables - Student tab in…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

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Question

On the Data Tables - Student tab in your Excel spreadsheet, update the given information section of the Income Statement for Hello Company with the data below:

Income Statement	Product A		Product B	Product C		Max Capacity
Units		42,000			7,000			3,000	52,000
Price per unit	$	11.00		$	8.00		$	60.00
Variable expense per unit	$	4.00		$	2.00		$	20.00
Total Fixed Costs	$	20,000		$	40,000		$	10,000

Required:

2. Using the Data Table What-If Analysis tool in Excel, determine the Units and Operating Income (Loss) for each product based on the following scenarios. (Hint: Don't forget that the warehouse can only hold up to 52,000 units.)

Scenario 1: Pete wants to find the mix of units that will result in the highest overall Operating Income, perform this analysis using a two variable data table. Product A can vary between 39,000 units and a maximum of 44,000 units. Product B can vary between 5,000 units and a maximum of 10,000 units. Both Products A and B are manufactured in 1,000-unit increments. The production level of Product C is the same each month at 3,000 units.

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