excel

Case study #1

1. Prepare a variable- costing income statement to determine the profitability of the Costco opportunity.

Costco Wholesale Corporation
Variable-costing Income Statement
For two months
Volume level
30,000
45,000
60,000
Sales @ $4.25 per pound
$127,500.00
$191,250.00
$255,000.00
Less: Variable expenses:

Salmon fillet cost @ $3/pound
$90,000.00
$135,000.00
$180,000.00

Repackaging labor @ $9/hour, repackage 75 pound/ hour
$3,600.00
$5,400.00
$7,200.00

Salmon package cost @ $0.53/3.5 pound box
$4,542.86
$6,814.29
$9,085.71

Display tray and liner @ $1.38 for tray and liner holding for 10 package
$1,182.86
$1,774.29
$2,365.71

Shipping cost to repackaging facility @ $0.06/pound
$1,800.00
$2,700.00
$3,600.00

Shipping cost to Costco @ $0.05/pound
$1,500.00
$2,250.00
$3,000.00

Pallet cost-City Ice in Seattle @ $11/pallet each holds 1000 pounds
$330.00
$495.00
$660.00

Pallet cost-Costco @ $10/pallet each holds1000 pounds
$300.00
$450.00
$600.00
Contribution margin
$24,244.29
$36,366.43
$48,488.57
Less: Fixed expenses:

Secretary/Administrative assistant @ $1500/month for two months
$3,000.00
$3,000.00
$3,000.00

TBRS technician salary and related expense @ $7500/month for two months
$15,000.00
$15,000.00
$15,000.00

TBRS Machine shipping cost
$1,000.00
$1,000.00
$1,000.00
Net income
$5,244.29
$17,366.43
$29,488.57

Particularly, (take the 30000 volume level as example)
1) Repackaging labor is found by .
2) Salmon package cost is found by .
3) Display tray and liner is found by .
4) Pallet cost-City Ice in Seattle is found by .
5) Pallet cost-Costco is found by

2. Prepare a variable-costing income statement to determine the probability of the Bashas’ opportunity.

Bashas' Inc.
Variable-costing Income Statement

Volume level
75,000
37,500
50,000
Sales @ $2.95 per pound