I don't know how to make the variable income statements and other statements required for the following data;
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Price Categories
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A
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B
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C
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D
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E
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Units Sold
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2,000
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1,000
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500
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400
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400
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Units Purchased
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3,000
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1,200
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1,000
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1,000
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1,000
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Resale Price
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$4.00
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$15.00
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$25.00
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$45.00
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$40.00
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Cost
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$0.50
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$5.00
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$10.00
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$20.00
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$20.00
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In addition to purchasing inventory (used books), the company incurs some operating expenses.
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Variable operating expenses
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Shipping per book
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$ 1.50
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Fixed expenses
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Internet-related costs
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$5,000
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Travel, etc.
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2,000
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Advertising
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1,000
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Other overhead
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3,000
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Required:
Computations (use Excel)
- Prepare a segmented variable costing (behavioral) income statement for the company in good format.
- Prepare a second variable costing statement assuming 90% of all the books in each category purchased were actually sold.
- Prepare a third variable costing statement assuming that the price is increased by 50% for all five categories (use original sales information).
- The owner enjoys the used-book business. Any suggestions as how to turn this into a full-time business venture so the owner can quit his other job? Prepare another income statement to support your idea.