Question

Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operating expenses account for 80% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin Operating expenses $ 100,000 60,000 40,000 35,000 $ 5,000 Operating income Prepare a flexible budget based on sales of 1,500, 2,500, and 3,500 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to O decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Unit 1,500 2,500 3,500 Sales revenue Less Variable expenses Cost of goods sold Operating expenses Total variable expenses Contribution margin + Fixed expenses Operating income

Answer 1

	Per unit	1500	2500	3500
Sales revenue	50	75000	125000	175000
Less
Cost of goods sold	30	45000	75000	105000
Operating expenses	3.5	5250	8750	12250
Contribution margin	16.5	24750	41250	57750
Fixed Expenses		28000	28000	28000
Operating Income		-3250	13250	29750

Workings

Selling price=100000/2000	50
Fixed operating expenses	28000
Variable operating expenses	7000
Variable operating expenses %	7.00%

AutoSave o 9.3HD Book1 - Excel Sign in - 0 X File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do Share Comments A Insert - Delete - Format Paste L- . Conditional Format as Formatting Table - Styles Cell Styles Sort & Find & Filter - Select Editing Clipboard Cells B1 Calibri - 11 -A A = = = 0 General BIU - B A - E 3$ -% Font Alignment Number - X f Selling price=100000/2000 C D Selling price=100000/2000 =100000/2000 Fixed operating expenses =35000*80% Variable operating expenses =35000*20% Variable operating expenses % =C3/100000 E F G H Per unit 1500 =100000/2000 =D6*50 2500 =E6*50 3500 =F6*50 Sales revenue Less Cost of goods sold Operating expenses Contribution margin Fixed Expenses Opertaing Income =C7*60% =C7*7% =C7-C9-C10 =D7*60% =E7*60% =F7*60% =D7*7% =E7*7% =F7*7% =D7-09-D10 =E7-E9-E10 =F7-F9-F10 =C2 =D12 =E12 =D11-D12 =E11-E12 =F11-F12 Sheet1 Sheet2 Sheet4 Sheet3 Sheets Sheet6 Sheet7 Sheets Ready E + 100% -- - ENG 4:44 AM 2 ^