Question

Hi, Looking to compare.

Can you please fill in the chart with the blanks and show how you got the numbers? That is key for me.

Thanks,

		2018		2019
Number of t-shirts		200,000		250,000
Number of t-shirts lost		2,000		3,300
Number of t-shirts sold		198,000		246,700
Average Selling Price		25		26
Average Cost Per T Shirt		10		9
Admin Capacity in terms of the number of customers who can be served		4,000		3,750
Admin Costs		1,200,000		1,162,500
Admin Cost Per Customer		300		310
Desgin Staff		5		5
Total Desgin Costs		250,000		275,000
Desgin Cost Per Employee		50,000		55,000

Complete the following table: Income Statement Amounts 2018		Revenue and Cost Effects of Growth in 2019		Revenue and Cost Effects of Price-Recovery in 2019		Cost Effect of Productivity in 2019		Income Statement Amounts 2019
1		2		3		4		1+2+3+4
Revenue	?		$1,217,500F		?		?		?
Costs	?		? Hint: only DM costs		$308,788F		$70,632F		?
Operating Income	?		?		?		?		?
$ 1,351,700 F Change in Operating Income 1. Calculate Operating Income for Both 2018 and 2019? 2. Calculate the growth, price recovery, and productivity components that explain the change in operating income from 2018 to 2019? 3. Comment on your answers in requirement 2. What do each of these components indicate

Answer 1

Hello, the question is very simple. But I am not able to read it properly as the rows and columns of the table are disturbed.

See, The first figure $ 1217500 F = F means favorable. This increase in revenue is only on account of increase in units sold. Difference in unit sold (multiply) Last Years Selling Price per unit i.e. (246700 - 198000) * 25 = 1217500 F

I am not able to make out the table. Repost so that i can help you