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SpreadsheetTemplate.xlsx
CM Breakeven
| Cookie Business | ||||
| Chocolate Chip | Sugar | Specialty | Total | |
| Units Sold | 1,500,000 | 980,000 | 300,000 | 2,780,000 |
| Sales | $ 1,875,000.00 | $ 882,000.00 | $ 1,050,000.00 | $ 3,807,000.00 |
| Less: Variable Costs | $ 690,000.00 | $ 205,800.00 | $ 81,000.00 | $ 976,800.00 |
| Contribution Margin | $ 1,185,000.00 | $ 676,200.00 | $ 969,000.00 | $ 2,830,200.00 |
| Less: Common Fixed Costs | $ 125,000.00 | |||
| Profit | $ 2,705,200.00 | |||
| Per item Contribution Margin | ||||
| Weighted Average Contribution Margin | ||||
| Break-even point in units |
Full Variable
| Cookie Business | |
| Productions Costs: | |
| Direct material | $ 0.60 |
| Direct labor | $ 1.00 |
| Variable manufacturing overhead | $ 0.40 |
| Total variable manufacturing costs per unit | $ 2.00 |
| Fixed manufacturing overhead per year | $ 139,000.00 |
| In addition, the company has fixed selling and administrative costs: | |
| Fixed selling costs per year | $ 50,000.00 |
| Fixed administrative costs per year | $ 65,000.00 |
| Selling price per cookie | $ 3.75 |
| Number of cookies produced | 2,780,000 |
| Number of cookies sold | 2,600,000 |
| Full (absorption) costing : | |
| Full cost per unit | |
| Ending Inventory Full (absorption) costing | |
| Variable costing : | |
| Variable cost per unit | |
| Ending Inventory Variable costing |
Special Order
| Cookie Business | |
| Number of cookies needed | 1,000 |
| Discounted price per cookie | $ 2.75 |
| Normal price per cookie | $ 3.75 |
| Cost of special printed design per cookie | $ 0.50 |
| Cost of tool needed to make the design | $ 100.00 |
| Revenue for special order | |
| Costs for special order: | |
| Design cost | |
| Tool cost | |
| Total Variable Manufacturing Cost | |
| Net profit |
IRR
| Cookie Business | |||||||||||||||
| As the owner of the Cookie Business, you are considering the following investment: | |||||||||||||||
| PV of Annuity Table | |||||||||||||||
| Purchase of new equipment | $ 250,000.00 | n | 1% | 2% | 3% | 4% | 5% | 6% | 8% | 10% | 12% | ||||
| Expected annual increase in sales | $ 48,017.50 | 1 | 0.9901 | 0.9804 | 0.9709 | 0.9615 | 0.9524 | 0.9434 | 0.9259 | 0.9091 | 0.8929 | ||||
| Time frame | 7 | years | 2 | 1.9704 | 1.9416 | 1.9135 | 1.8861 | 1.8594 | 1.8334 | 1.7833 | 1.7355 | 1.6906 | |||
| Acceptable rate needed | 9% | 3 | 2.941 | 2.8839 | 2.8286 | 2.7751 | 2.7233 | 2.673 | 2.5771 | 2.4869 | 2.4018 | ||||
| 4 | 3.902 | 3.8077 | 3.7171 | 3.6299 | 3.546 | 3.4651 | 3.3121 | 3.1699 | 3.0374 | ||||||
| Calculate the Internal Rate of Return: | 5 | 4.8534 | 4.7135 | 4.5797 | 4.4518 | 4.3295 | 4.2124 | 3.9927 | 3.7908 | 3.6048 | |||||
| PV of annuity factor | 6 | 5.7955 | 5.6014 | 5.4172 | 5.2421 | 5.0757 | 4.9173 | 4.6229 | 4.3553 | 4.1114 | |||||
| Internal rate of return | 7 | 6.7282 | 6.472 | 6.2303 | 6.0021 | 5.7864 | 5.5824 | 5.2064 | 4.8684 | 4.5638 | |||||
| 8 | 7.6517 | 7.3255 | 7.0197 | 6.7327 | 6.4632 | 6.2098 | 5.7466 | 5.3349 | 4.9676 | ||||||
| Accept or reject | 9 | 8.566 | 8.1622 | 7.7861 | 7.4353 | 7.1078 | 6.8017 | 6.2469 | 5.759 | 5.3283 | |||||
| 10 | 9.4713 | 8.9826 | 8.5302 | 8.1109 | 7.7217 | 7.3601 | 6.7101 | 6.1446 | 5.6502 | ||||||
| 11 | 10.3676 | 9.7869 | 9.2526 | 8.7605 | 8.3064 | 7.8869 | 7.139 | 6.4951 | 5.9377 | ||||||
| 12 | 11.2551 | 10.5753 | 9.954 | 9.3851 | 8.8633 | 8.3838 | 7.5361 | 6.8137 | 6.1944 | ||||||
| 13 | 12.1337 | 11.3484 | 10.635 | 9.9857 | 9.3936 | 8.8527 | 7.9038 | 7.1034 | 6.4236 | ||||||
| 14 | 13.0037 | 12.1063 | 11.2961 | 10.5631 | 9.8986 | 9.295 | 8.2442 | 7.3667 | 6.6282 | ||||||
| 15 | 13.8651 | 12.8493 | 11.938 | 11.1184 | 10.3797 | 9.7123 | 8.5595 | 7.6061 | 6.8109 |
Cash Budget
| Cookie Business | |||
| The budgeted credit sales are as follows: | |||
| December last year | $ 250,000 | ||
| January | $ 125,000 | ||
| February | $ 300,000 | ||
| March | $ 90,000 | ||
| Collection: | |||
| Month of the sale | 80% | ||
| Month following the sale | 20% | ||
| Estimated cash receipts | |||
| January | February | March | |
| Last month's sales | |||
| Current month's sales | |||
| Total | |||
Variances
| Cookie Business | ||
| Actual Total Cost of Direct Materials | $ 225,000 | |
| Standard Total Cost of Direct Materials | $ 224,800 | |
| Actual Materials Used | 30 | |
| Standard Materials Used | 31 | |
| Actual Direct Labor Rate | $ 15.50 | |
| Standard Labor Rate | $ 15.00 | |
| Actual Hours Worked | 45 | |
| Standard Hours Worked | 40 | |
| Amount | Favorable/ Unfavorable | |
| Calculate Materials Variances: | ||
| Materials Price Variance | ||
| Materials Quantity Variance | ||
| Calculate Labor Variances: | ||
| Labor Rate Variance | ||
| Labor Efficiency Variance |
