Product 1

Price/Unit 125.00
Unit Volume/ Year 8,400.00
Cost of Goods sold/Unit 62.00
Gross Sales 1,050,000.00
less: Commissions 31,500.00
Net Sales 1,018,500.00
less: Cost of Good Slod 520,800.00
Gross Profit 497,700.00
Total Gross Profit 1,113,630.00
less:
other Operating expenses 245,000.00
General & Administrative 387,000.00
Interest expenses 112,000.00
Income before taxes 369,630.00
less: Income taxes 170,029.80
Net Income 199,600.20
 Scenerio 1
Product 2 Product 1 Product 2
345.00 150.00 345.00
4,200.00 6,500.00 4,200.00
188.00 62.00 188.00
1,449,000.00 975,000.00 1,449,000.00
43,470.00 29,250.00 43,470.00
1,405,530.00 945,750.00 1,405,530.00
789,600.00 403,000.00 789,600.00
615,930.00 542,750.00 615,930.00
1,158,680.00

245,000.00
387,000.00
112,000.00
414,680.00
190,752.80
223,927.20
Scenerio 2 Scenerio 3
Product 1 Product 2 Product 1 Product 2
125.00 345.00 125.00 345.00
8,400.00 4,200.00 8,400.00 4,200.00
62.00 188.00 62.00 188.00
1,050,000.00 1,449,000.00 1,050,000.00 1,449,000.00
31,500.00 43,470.00 31,500.00 43,470.00
1,018,500.00 1,405,530.00 1,018,500.00 1,405,530.00
520,800.00 789,600.00 572,880.00 868,560.00
497,700.00 615,930.00 445,620.00 536,970.00
1,113,630.00 982,590.00

245,000.00 245,000.00
210,000.00 387,000.00
112,000.00 112,000.00
546,630.00 238,590.00
251,449.80 109,751.40
295,180.20 128,838.60
Scenerio 4
Product 1 Product 2
125.00 345.00
5,611.92 2,805.96
62.00 188.00
701,489.72 968,055.82
21,044.69 29,041.67
680,445.03 939,014.14
347,938.90 527,520.27
332,506.13 411,493.87
744,000.00

245,000.00
387,000.00
112,000.00
0.00
0.00
0.00
Planned Sales in Units 20000
Selling Price 15
Variable Cost per unit 9
Total Fixed Cost 60000

Part a Sales 300,000.00

less Variable cost 180,000.00
less fixed cost 60,000.00
Profit 60,000.00

Part b Scenerio 1 Scenerio 2

Decrease in Selling price of 10% An Increase in Variable Cost of 10%

Sales 270,000.00 Sales 300,000.00

less Variable cost 180,000.00 less Variable cost 198,000.00
less fixed cost 60,000.00 less fixed cost 60,000.00
Profit 30,000.00 Profit 30,000.00

Part c If the selling price declined by 10%, how many more units would have to be sold to achieve the planned profit?

Planned Sales in Units 26666.6666666667

Selling Price 13.5
Variable Cost per unit 9
Total Fixed Cost 60000
Sales 360,000.00
less Variable cost 240,000.00
less fixed cost 60,000.00
Profit 60,000.00
 Scenerio 3 Scenerio 4
An increase in total fixed cost of 10% A decline in unit sales of 10%

Sales 300,000.00 Sales 330,000.00

less Variable cost 180,000.00 less Variable cost 180,000.00
less fixed cost 66,000.00 less fixed cost 60,000.00
Profit 30,000.00 Profit 30,000.00

nned profit?
Product WADGET WEDGET WIDGET WODGET WUDGET

Price/Unit $ 125.00 $ 345.00 $ 99.00 $ 380.00 $ 235.00

Unit volume/ Year 8400 4200 10950 4000 3850
COGS/ Unit $ 62.00 $ 188.00 $ 52.00 $ 225.00 $ 109.00

Sales Commissions 0.03

Gross Sales $ 1,050,000.00 $ 1,449,000.00 $ 1,084,050.00 $ 1,520,000.00 $ 904,750.00

Less: Commissions $ 31,500.00 $ 43,470.00 $ 32,521.50 $ 45,600.00 $ 27,142.50
Net Sales $ 1,018,500.00 $ 1,405,530.00 $ 1,051,528.50 $ 1,474,400.00 $ 877,607.50
Less: COGS $ 520,800.0000 $ 789,600.0000 $ 569,400.0000 $ 900,000.0000 $ 419,650.0000
Gross Profit $ 497,700.0000 $ 615,930.0000 $ 482,128.5000 $ 574,400.0000 $ 457,957.5000