Name: Instructor: Accounting Principles, Seventh Edition by Weygandt, Kieso, and Kimmel Solving Accounting Principles Problems Using

Microsoft Excel for Windows by Rex A Schildhouse

Date: Course:

P22-2A Utech Company bottles and distributes Livit, a diet soft drink. The beverage is sold for $0.50 per 16-ounce bottle to retailers, who charge customers per bottle. For the year 2008, $0.75 management estimates the following revenues and costs: Net sales Selling expenses - Variable $1,800,000 $70,000 Direct materials Selling expenses - Fixed 430,000 65,000 Direct labor Administrative expenses - Variable 352,000 20,000 Manufacturing overhead - Variable Administrative expenses - Fixed 316,000 60,000 Manufacturing overhead - Fixed 283,000 Instructions: (a) Prepare a CVP income statement for 2008 based on management's estimates. UTECH COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2008 Net sales $1,800,000 Variable expenses Cost of Goods Sold $1,098,000 (1) Selling expenses - Variable 70,000 Administrative expenses - Variable 20,000 Total variable expenses 1,188,000 Contribution margin 612,000 Fixed expenses Manufacturing overhead - Fixed 283,000 Selling expenses - Fixed 65,000 Administrative expenses - Fixed 60,000 Total fixed expenses 408,000 Net income $204,000
$ 8 4 0, 0 00 $ 8 6 4 7 0, 0 00 . 4 0 . . 3 5 4 0

(1)

Computation of cost of goods sold Direct materials Direct labor Manufacturing overhead - Variable Title

$430,000 352,000 316,000 $1,098,000

(b) Compute the break-even point in (1) units and (2) dollars. (1) Net sales Total variable expenses Contributions Variable costs as percentage of sales Variable costs per bottle Contributions per bottle Total fixed costs Break-even in units Break-even in units Selling Price $1,800,000 1,188,000 612,000 34% $0.33 $0.17 408,000 2,400,000 2,400,000 $0.50

(2)

FileName: 187499108.xls.ms_office, Tab: Problem P22-2A, Page 1 of 3, 11/11/2013, 9:32 AM

Name: Instructor:
(2) Title , Seventh Edition by Weygandt, Kieso, and $1,200,000 Accounting Principles Kimmel (c) Compute the contribution margin ratio and the margin of safety ratio. Contribution margin ratio = Margin of safety ratio $612,000 $1

Date: Course:

$1,800,000 $3 $238,000

= =

34% 33%

(d) Determine the sales dollars required to earn a net income of Required sales = $646,000 34%

$1,900,000

FileName: 187499108.xls.ms_office, Tab: Problem P22-2A, Page 2 of 3, 11/11/2013, 9:32 AM

Instructions for the Microsoft Excel Templates Detail and information on Excel is contained within the manual. Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant and bring up one of several help menus. Type your name into the cell "D5". This will be copied by formula to the rest of the pages as required. Type the due date of your problem into cell "I5". This will be copied by formula to the rest of the pages as required. Type the instructor's name into cell "D6". This will be copied by formula to the rest of the pages as required. Type the course identifier into cell "I6". This will be copied by formula to the rest of the pages as required. The problem is identified for you in cell "B7". In "DATE" cells enter the date in any of several formats and Excel will format it correctly. If more than one page is preformatted into the problem, page breaks are preset and formulas are set to copy the header into the remaining pages. Place the proper account title in the cell where the word "ACCOUNT" appears on the template. Place the amount in the cell where the word "AMOUNT" appears on the template. A formula may be placed in

Enter a number like 914 to signify units or gallons where the word "NUMBER" appears. Write a formula into cells where the word "FORMULA" appears. In these cells, an amount calculated outside of

Place the explanation for the entry in the cell where the word "EXPLANATION" appears on the template. Insert the account number where "ACCT #" appears on the template during posting. Insert the journal reference where "JOURN #" appears on the template during posting. Insert the title in the cell where "TITLE" appears on the template. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required. The gray filled cells define the perimeter of the problem and the print area. The problem is formatted for whole dollars with comma separations (no cents) except where required. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. Negative values may be shown as ($400) vice -$400. Enter a string like: ($259,417 X 12 months) + (0.3651 X 5,434,631) where the word TEXT appears.