ABC, Inc. is a newly organized manufacturing business this year. 4 1

Project 3 is due by
Tuesday, October 16th. Send via the
assignment area and make sure you save your file with first initial of first
name and last name. Requirement Points
You will be graded on the accuracy of your answer and usage
of cell referencing in the DATA area. Covers
material in chapters 7 and 8. 1 0.5
2 1
DATA 3 1
ABC, Inc. is a newly organized manufacturing business this
year. 4 1
The following company’s costs and expenses are: 5 1
6 1
Sales
price per unit $80
7 0.5
Manufacturing
costs: Fixed
Costs Variable Costs 8 0.5
Direct
materials $8
9 0.5
Direct
labor 10 10 0.5
Variable
Manufacturing overhead 4 11 0.5
Fixed
Manufacturing overhead $120,000
12 1
Period
expenses: 13 1
Variable
Selling and administrative expenses 6 “Total pts.
Possible” 10
Fixed
Selling and Administrative expenses 10,000
Totals $130,000 $28
Units
produced 6,000 units
Units
sold 5,900 units

Required: Use
the information in the DATA field above using cell referencing to answer the
following requirements.
1. Calculate the unit
cost for variable costing. Review
Exhibit 8-2 on page 328.
2. Calculate the unit
cost for absorption costing. Review
Exhibit 8-2 on page 328.
3. Prepare an
absorption-costing income statement.
Review Exhibit 8-3 on page 329.
4. Prepare a
variable-costing income statement. Review Exhibit 8-3 on page 329.
5. Reconcile the
differences in income that you calculated in #3 and #4 using exhibit 8-4 on
page 330 as your guide or use the shortcut reconciliation on page 330-331.
6. Calculate the
breakeven point in units. Reference page
279.
7. Calculate the
breakeven point in sales dollars.
8. Calculate the
safety margin.
9. What does the margin of safety mean?
Reference page 285. Your answer should
be at least 75 words.
10. Calculate the
operating leverage . Reference page 296
11. What if sales
volume increases by 5% how much will income increase in percentage terms? Make sure you have read over the DOL
discussion and
understand the multiplier impact of changes in sales volume
that occurs based on DOL.
12. What if the
direct material cost per unit increases
from $8 a unit to $10, what will be the new breakeven in units? Explain why it changed.
You should only have to change the direct labor in the data
area and actually all your answers should be updated. Please put the direct material cost back to
the original number once you have answered the question?
13. What if the
manufacturing overhead cost decreases from 120,000 to 115,000, what will be the
new breakeven in units? Explain why it
changed.
You should only have to change the fixed MOH in the data
area and actually all your answers should be updated. Please put the fixed MOH cost back to the
original number once you have answered the question?