Student workbook for VisuSon Inc. Case A210-01
Many cells in this workbook have been protected to prevent accidental alteration of
formulas and values. Unprotected cells have been highlighted in light green.
To alter protected cells, use the password “visuson”.
Total % Var. % Discr. Var. Non- Discr.
Revenues (net) 65,743$ 100% 65,743$
Cost of Goods
Direct Materials 12,742 100% 0% 12,742 – –
Direct Labor 6,959 0% 0% – 6,959 –
Mfg. Overhead – – –
Salary & Wages 4,078 0% 4% – 3,918 160
Operating Expense
Selling
Salary & Wages 2,807 34% 7% 965 1,652 190
Marketing & Advertising 5,036 15% 85% 755 – 4,281
Shipping 1,747 95% 1,660 87 –
Fixed
2009 Contribution I/S Percentage ’08 Eq. Units
Revenues 65,743$ 100.0% 110.000
Variable Expenses:
Nondiscretionary Fixed:
Product Costs 13,037$
Discretionary Fixed:
Product Costs 160$ 1.45
Selling 4,471 40.65
Dollars
2009 Contribution Income Statement Assumption
Revenues 65,743$ 10% growth at current price levels
Equivalent Units 110.000
Variable Expenses:
Nondiscretionary Fixed Expenses:
Product Costs 13,037 Budgeted staffing and base wage levels
Selling 1,739 Budgeted staffing and base wage levels
R & D 4,724 Budgeted staffing and base wage levels
G & A 6,438 25,938
Net Contribution 20,873
Discretionary Fixed Expenses: Managers awarded budgeted bonuses
Product Costs 160
Selling 4,471
R & D 1,889
G & A 2,505 9,025
Non-Cash Costs 5,651
Operating Income (Loss) 6,197
Interest Expense* 1,250
Before Tax Income (Loss) 4,947
Break-even Revenue 58,795$
Margin of Safety 6,948$
Product Costs 13,501$ 20.5% of Revenue
Selling 5,352 8.1% of Revenue
Balance Sheet FYE 2008 FYE 2009
Current Assets
Cash 5,930$ 6,563$ “six weeks operating expenditures”
Non-Current Assets Budgeted CAPEX and D&A given for PPE & Other Asset combined
Property, Plant and Equipment 26,531 = $20,208 + 4,282 + 5,960 – 5,651 = $24,799
Less Accumulated Depreciation 6,323
Other Assets 4,282 4,216 17% of $24,799
Current Liabilities
Accounts Payable 4,496 4,976 Cash based on operating expense, A/P proportional to cash
Notes Payable 14,860 13,856 This is the plug
Tax Payable 384 433
Accrued Liabilities 2,437 2,697 Also proportional to cash/expenses
Current Portion of Long-term Debt 339 339 from balance sheet exhibit
Total Current Liabilities 22,516 22,300
Non-Current Liabilities
Long-term Debt 348 9 = 348 – 339
Total Liabilities 22,865 22,310
Owners’ Equity
Common Stock 189 189
Additional Paid-in-Capital 4,546 4,546
Total Owners’ Equity 29,251 32,466
Accounts Receivable (net) 12,898 14,229 “between 60 and 80 days of trailing sales”
Prepaid Expenses 2,030 2,030
Total Current Assets 27,625 29,977
Statement of Cash Flows
2008 2009
OPERATIONS:
Net Income 3,738$ 3,216$
INVESTING:
Additions to PP&E 6,509
Acquistitions of Technology Licenses 1,889
Cash Flow used for Investing Activities 8,398 5,960 Total provided in the budget
FINANCING:
Borrowing of Notes Payable 14,860 13,856 All new notes payable as of FYE 2009
Repayments of Notes Payable (12,040) (14,860) All notes payable as of FYE 2008
Long-term Borrowing – –
Repayment of Long-term Debt (339) (339)
Cash Dividends Paid – –
Cash Flow from (used by) Financing 2,481 (1,343)
Adjustments to Reconcile:
Depreciation and Amortization 5,182 5,651 Provided in the budget
Accounts Receivable (1,462) (1,332) Following adjustements computed from the balance sheet
Prepaid Expenses (230) –
Accounts Payable 73 479
Tax Payable 15 49
Accrued Liabilities 40 260
Cash Flow from Operating Activities 6,590 7,935