## Prepare a flexible budget using estimated annual unit sales = 3,100. Enter volume in the Budget and Variance Analysis tab, column H, row 4. Enter all other data and calculations in the appropriate cells (column H).

Instructions: In attached Excel File, Use Excel formulas in all applicable cells.
Column F, rows 50-56. Compute the break-even point in units and dollars. Compute the margin of safety.

Flexible Budget Column

1 Prepare a flexible budget using estimated annual unit sales = 3,100. Enter volume in the Budget and Variance Analysis tab, column H, row 4. Enter all other data and calculations in the appropriate cells (column H).
2 The company adopted the accrual method of accounting in 2017.
3 Increase the average animal fee by 2.75% for the first five months and 3.50% for the remaining seven months of the year.
4 The owner is working with regional competitors on COVID-19 planning and small business loan approvals. Estimated fees for their time are equal to 50 clients at an average fee equal to \$750 each.
5 Excess cash was invested in an S&P 500 Index fund with estimated annual capital gain and dividend income equal to \$13,000.
6 The company sold grooming equipment for a \$500 dollar gain. However, the equipment was not delivered to the buyer and the owner did not receive payment.
7 The company is diversifying into animal training and recorded unearned income in 2018 equal to \$250,000 for cash advances from the U.S. government. The company expects to train several animals for special operation forces in 2020.
Payment is expected to be \$25,000.
8 Increase the variable cost per unit (animal) by 3.15%. This applies to all variable cost categories (excluding advertising, bedding, and specialty food).
9 The driver for bedding and specialty food is the number of non-traditional animals. The company expect 275 animals per year at an average cost of \$1.35 per animal for bedding and \$1.09 per animal for specialty food.
10 The company plans to relocate the business. This may increase rent by \$1000.
11 The company uses a dated advertising program including the yellow pages and billboard signs. The company plans to reduce costs and increase effectiveness by investing in an online campaign.
The cost structure changes to a mixed cost and includes \$900 fixed plus variable costs. The variable cost is equal to .02 per online view plus \$3.00 for appointments scheduled online.
The company expects 1,250 views and 185 scheduled appointments.
12 Compute the break-even point in units and dollars. Compute the margin of safety. Enter the information in the Budget and Variance Analysis tab, rows 50-56.
13 Use formulas to compute variances and explain why the variances are positive or negative. Enter formulas in the Budget and Variance Analysis tab column J. Write your explanations in column L.