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EXHIBIT 1

HANSON MANUFACTURING COMPANY


Income Statement
For Year Ending December 31, 1986
Gross Sales
Cash Discounts

40,690,234.00
622,482.00

Net Sales
Cost of Sales

40,067,752.00
25,002,386.00

Gross Margin
Less: Selling Expense
General and Administration Expense
Depreciation

15,065,366.00
7,058,834.00
2,504,597.00
5,216,410.00

14,779,841.00

Operating Income
Other Income

285,525.00
78,113.00

Income before interest


Less: Interest Expense

363,638.00
555,719.00

Income (Loss)

(192,081.00)

EXHIBIT 2
ANALYSIS OF PROFIT AND LOSS BY PRODUCT
Year Ended December 31, 1986

Rent
Property taxes
Property insurance
Compensation insurance
Direct labor
Indirect labor

Product 101
Thousands
$/Cwt.
721.00
0.3383
240.00
0.1125

Product 102
Thousands
$/Cwt.
603.00
0.5856
192.00
0.1862

201.00
317.00
4,964.00
1,693.00

0.0941
0.1486
2.3282
0.7941

153.00
167.00
2,341.00
814.00

0.1486
0.1620
2.2740
0.7903

86.00
57.00

0.0403
0.0269

96.00
49.00

0.0929
0.0472

38.00
2,935.00

0.0180
1.3766

30.00
1,809.00

0.0288
1.7572

201.00
68.00

0.0941
0.0319

183.00
57.00

0.1774
0.0557

Total
Selling Expense
General administration
Depreciation
Interest

11,521.00
3,496.00
1,324.00
2,169.00
201.00

5.4036
1.6397
0.6209
1.0172
0.0941

6,494.00
1,758.00
499.00
1,643.00
153.00

6.3059
1.7069
0.4850
1.5955
0.1490

Total Cost
Less other income

18,711.00
39.00

8.7755
0.0184

10,547.00
20.00

10.2423
0.0192

Sales (net)
Profit (loss)

18,672.00
19,847.00
1,175.00

8.7571
9.3084
0.5513

10,527.00
9,977.00
(550.00)

10.2231
9.6900
(0.5331)

Power
Light and Heat
Building Service
Materials
Supplies
Repairs

Unit sales (cwt.)


Quoted selling price
$
Cash discounts taken, percent
of selling price

2,132,191.00
9.41
1.08%

1,029,654.00
9.91
2.22%

S BY PRODUCT
1, 1986

ANALYSIS OF PROFIT AN
Showing Variations
1.65

0.2049

Product 103
Thousands
$/Cwt.
718.00
0.7273
153.00
0.1555

TOTAL
Thousands

Product 101
Std/cwt
Total at std
0.3383
337
0.1125
112

2,042.00
585.00

Rent
Property taxes
Property insurance
Compensation insurance
Direct labor
Indirect labor

0.0941
0.1486
2.3282
0.7941

94
148
2,321
792

Power
Light and Heat

0.0403
0.0269

40
27

Building Service
Materials

0.0180
1.3766

18
1,372

Supplies
Repairs

0.0941
0.0319

94
32

202.00
172.00
2,640.00
883.00

0.2047
0.1747
2.6746
0.8947

556.00
656.00
9,945.00
3,390.00

116.00
39.00

0.1171
0.0392

298.00
145.00

28.00
1,862.00

0.0288
1.8862

96.00
6,606.00

135.00
39.00

0.1363
0.0396

519.00
164.00

6,987.00
1,805.00
681.00
1,404.00
202.00

7.0787
1.8286
0.6904
1.4223
0.2043

25,002.00
7,059.00
2,504.00
5,216.00
556.00

Total Production Cost


Selling Expense
General administration
Depreciation
Interest

5.4036
1.6397
0.6209
1.0172
0.0941

5,387
1,635
619
1,014
94

11,079.00
19.00

11.2243
0.0192

40,337.00
78.00

Total Cost
Less other income

8.7755
0.0184

8,748
18

11,060.00
10,243.00
(817.00)

11.2051
10.3784
(0.8267)

40,259.00
40,067.00
(192.00)

Actual Sales (net)


Profit (loss)

8.7571
9.3084
0.5513

8,730
9,279
550

Unit Sales (cwt.)

996,859

986,974.00
10.56
1.72%

EXHIBIT 4
ANALYSIS OF PROFIT AND LOSS BY PRODUCT, AT STANDARD
Showing Variations from January 1 to June 30,1987

Product 102
Std/cwt
Total at std
0.5856
417
0.1862
133

Product 103
Std/cwt
Total at std
0.7273
365
0.1555
78

Total Std
(Thousands)
1,119
323

Total Actual
(Thousands)
1,021
307

0.1486
0.1620
2.2740
0.7903

106
115
1,619
563

0.2047
0.1747
2.6746
0.8947

103
88
1,341
448

302
351
5,281
1,803

278
348
5,308
1,721

0.0929
0.0472

66
34

0.1171
0.0392

59
20

165
80

170
83

0.0288
1.7572

21
1,251

0.0288
1.8862

14
946

53
3,569

50
3,544

0.1774
0.0557

126
40

0.1363
0.0396

68
20

288
91

288
88

6.3059
1.7069
0.4850
1.5955
0.1490

4,490
1,215
345
1,136
106

7.0787
1.8286
0.6904
1.4223
0.2043

3,548
917
346
713
102

13,425
3,767
1,310
2,863
302

13,206
3,706
1,378
2,686
290

10.2423
0.0192

7,294
14

11.2243
0.0192

5,626
10

21,668
42

21,266
42

10.2231
9.6900
(0.5331)

7,280
6,900
(380)

11.2051
10.3784
(0.8267)

5,617
5,202
(414)

21,626
21,382
(244)

21,224
21,382
158

712,102

501,276

Variances
98 F
16 F
24
3
(27)
82

F
F
U
F

(5) U
(3) U
3 F
25 F
0
3 F
219
61
(68)
177
12

F
F
U
F
F

402 F
(0)
402 F
(0)
(402) U

Selling Price/unit
Less: Variable Costs/unit
CM/Unit
Less: Avoidable FC
Segment Margin
Less: Allocated FC
Net Income (Loss)

Product 101
9.41
(4.02)

Product 103
10.56
(5.03)

TOTAL
29.88
(13.57)

5.39
-

5.39
-

5.53
-

16.31
-

5.39
(4.76)
0.63

5.39
(5.72)
(0.33)

5.53
(6.20)
(0.66)

16.31
(16.67)

1
Assuming product 3 is dropped
Allocated fixed cost is shared equally
Other Income from Product 103 is shared equallt
Product 1
CM
5,373.37
Less: Allocated Fixed Cost
6,293.76
Less: Other Income from 103
4.81
Increase (Decrease) in profit

Product 102
9.91
(4.52)

(925.21)

Product 2
3,838.80
5,522.52
4.81
(1,688.53)

(0.36)

Total
9,212.17
11,816.28
9.62
(2,613.74)

If Product 3 is dropped, the decrease due to lost positive segment margin of Product 103 is 2,613.74 million'
2
Assuming Product 3 is not dropped
Units sold for product 1 at 9.41 = 750,000
Units sold for product 1 at 8.64 = 1,000,000
Assuming FC allocation from 1986 is the same
Product 1
Product 2
Product 3
Total
CM | SP = 9.41
7,057.50
3,838.80
2,772.81 13,669.11
Less: Allocated FC
4,740.86
4,075.43
3,105.81 11,922.10
Net Income (Loss)

CM | SP = 8.64
Less: Allocated FC
Net Income (Loss)

2,316.64

(236.63)

(333.00)

1,747.01

Product 1
Product 2
Product 3
Total
4,620.30
3,838.80
2,772.81 11,231.91
4,740.86
4,075.43
3,105.81 11,922.10
(120.56)

(236.63)

(333.00)

(690.19)

uct 103 is 2,613.74 million'

EXHIBIT 2
ANALYSIS OF PROFIT AND LOSS BY PRODUCT
Year Ended December 31, 1986
1.65

Rent
Property taxes
Property insurance
Compensation insurance
Direct labor
Indirect labor
Power
Light and Heat
Building Service
Materials
Supplies
Repairs

Product 101
Thousands
$/Cwt.
721.00 0.3383
240.00 0.1125
201.00 0.0941
317.00 0.1486
4,964.00 2.3282
1,693.00 0.7941
86.00 0.0403
57.00 0.0269
38.00 0.0180
2,935.00 1.3766
201.00 0.0941
68.00 0.0319

Product 102
Thousands
$/Cwt.
603.00
0.5856
192.00
0.1862
153.00
0.1486
167.00
0.1620
2,341.00
2.2740
814.00
0.7903
96.00
0.0929
49.00
0.0472
30.00
0.0288
1,809.00
1.7572
183.00
0.1774
57.00
0.0557

0.2049

Product 103
Thousands
$/Cwt.
718.00
0.7273
153.00
0.1555
202.00
0.2047
172.00
0.1747
2,640.00
2.6746
883.00
0.8947
116.00
0.1171
39.00
0.0392
28.00
0.0288
1,862.00
1.8862
135.00
0.1363
39.00
0.0396

Total
Selling Expense
General administration
Depreciation
Interest

11,521.00
3,496.00
1,324.00
2,169.00
201.00

5.4036
1.6397
0.6209
1.0172
0.0941

6,494.00
1,758.00
499.00
1,643.00
153.00

6.3059
1.7069
0.4850
1.5955
0.1490

6,987.00
1,805.00
681.00
1,404.00
202.00

7.0787
1.8286
0.6904
1.4223
0.2043

Total Cost
Less other income

18,711.00
39.00

8.7755
0.0184

10,547.00
20.00

10.2423
0.0192

11,079.00
19.00

11.2243
0.0192

Sales (net)

18,672.00
19,847.00

8.7571
9.3084

10,527.00
9,977.00

10.2231
9.6900

11,060.00
10,243.00

11.2051
10.3784

Profit (loss)

1,175.00

0.5513

Unit sales (cwt.)


Quoted selling price
Cash discounts taken,
percent of selling price

2,132,191.00
9.41
1.08%

(550.00)
$

(0.5331)

1,029,654.00
9.91
2.22%

(817.00)
$

(0.8267)

986,974.00
10.56
1.72%

EXHIBIT 4
ANALYSIS OF PROFIT AND LOSS BY PRODUCT, AT STANDARD
Showing Variations from January 1 to June 30,1987

TOTAL Thousands

Product 101
Product 102
Std/cwt
Total at std
Std/cwt
0.3383
337
0.5856
0.1125
112
0.1862
0.0941
94
0.1486
0.1486
148
0.1620
2.3282
2,321
2.2740
0.7941
792
0.7903
0.0403
40
0.0929
0.0269
27
0.0472
0.0180
18
0.0288
1.3766
1,372
1.7572
0.0941
94
0.1774
0.0319
32
0.0557

2,042.00
585.00
556.00
656.00
9,945.00
3,390.00
298.00
145.00
96.00
6,606.00
519.00
164.00

1,021.00 Rent
292.50 Property taxes
278.00 Property insurance
Compensation insurance
Direct labor
1,695.00 Indirect labor
Power
72.50 Light and Heat
48.00 Building Service
Materials
Supplies
Repairs

25,002.00
7,059.00
2,504.00
5,216.00
556.00

Total Production Cost


Selling Expense
General administration
Depreciation
Interest

5.4036
1.6397
0.6209
1.0172
0.0941

5,387
1,635
619
1,014
94

6.3059
1.7069
0.4850
1.5955
0.1490

40,337.00
78.00

Total Cost
Less other income

8.7755
0.0184

8,748
18

10.2423
0.0192

40,259.00
40,067.00

Actual Sales (net)

8.7571
9.3084

8,730
9,279

10.2231
9.6900

Profit (loss)

0.5513

550

(192.00)

3,529.50
1,252.00
2,608.00
278.00

Unit Sales (cwt.)

996,859

(0.5331)
712,102

Product 102
Product 103
Total at std
Std/cwt
Total at std
417
0.7273
365
133
0.1555
78
106
0.2047
103
115
0.1747
88
1,619
2.6746
1,341
563
0.8947
448
66
0.1171
59
34
0.0392
20
21
0.0288
14
1,251
1.8862
946
126
0.1363
68
40
0.0396
20

Total Std (Thousands)

Total Actual (Thousands)

Variances

1,119
323
302
351
5,281
1,803
165
80
53
3,569
288
91

1,021
307
278
348
5,308
1,721
170
83
50
3,544
288
88

98
16
24
3
(27)
82
(5)
(3)
3
25
0
3

4,490
1,215
345
1,136
106

7.0787
1.8286
0.6904
1.4223
0.2043

3,548
917
346
713
102

13,425
3,767
1,310
2,863
302

13,206
3,706
1,378
2,686
290

219
61
(68)
177
12

7,294
14

11.2243
0.0192

5,626
10

21,668
42

21,266
42

402
(0)

7,280
6,900

11.2051
10.3784

5,617
5,202

21,626
21,382

21,224
21,382

402
(0)

158

(402)

(380)

(0.8267)
501,276

(414)

(244)

F
F
F
F
U
F
U
U
F
F
F
F
F
U
F
F
F
F
U