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Homework answers / question archive / Rigney Manufacturing is a small components maker located in the upper midwest
Rigney Manufacturing is a small components maker located in the upper midwest. The company specializes in icraft turbine blades and focused its production around a single family of products. Recently, one of the new members of the company's board of directors suggested the company could increase its profitability by adding a second product line with an increase in the rent the company currently pays of only 10 percent Before the board member could show her analysis, she had to resign, because of a conflict of interest. She left behind the incomplete spreadsheet below apologizing that she had neglected to save the full version. She suggested that you could complete the analysis based on what information was included. Required: Fill in the blank cells(Enter all amounts as positive values.) RIGNEY MANUFACTURING Projected Income Statement For One Quarter Status Quo % Increase Alternative: Single Product Decrease) TWO Products Difference 5 43.490 $ 90.000 224 11,375 2.625 Sales revenue Costs Material Labor Ron Depreciation Utilities Other Total costs Operating profit 47,000 12,500 1,875 15 30 14,375 11.375 1.125 4,500 171,500 $ $ 13.200
Ans:
| Single Product | %increase/ (decrease) | Two Products | Difference | |
| Sales Revenue | $ 173,960 | 25% | $ 217,450.00 | $ 43,490.00 |
| Costs: | ||||
| Material | $ 90,000 | 22% | $ 109,800.00 | $ 19,800.00 |
| Labor | $ 8,750 | 30% | $ 11,375.00 | $ 2,625.00 |
| Rent | $ 47,000 | 10% | $ 51,700.00 | $ 4,700.00 |
| Depreciation | $ 12,500 | 15% | $ 14,375.00 | $ 1,875.00 |
| Utilities | $ 8,750 | 30% | $ 11,375.00 | $ 2,625.00 |
| Other | $ 4,500 | 25% | $ 5,625.00 | $ 1,125.00 |
| Total Cost | $ 171,500 | 19% | $ 204,250.00 | $ 32,750.00 |
| Operating Profit | $ 2,460 | 437% | $ 13,200.00 | $ 10,740.00 |
The above calculation is based on using the given information and filling the remaining.
For this first of all cost information is filled. Then from two product column sales of two product is derived.
So now, we have sales of two products and increase in sales, then we can calculate sales of single product.
