4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this 1 Chapter 5: Applying Excel 3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 0.000 units 550 per unit $30 per unit $500,000 (a) What is net operating income (Negative amount should be indicated by a minus sign.) et operating income (b) By what percentage did the net operating income increase? ncrease in net operating income 5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for S15,000 and at that price, Thad estimates 200 units would be sold each year, The variable cost to produce and sell the cycles would be $10,500 per unit. The annual ficed cost would be S855,000 a. What is the break-even in unit sales? ak-even in unit sales b. What is the margin of safety in dolars? Margin of safety in C. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Westem Hombre would have to be reduced to $12,500 to compete effectively. In that event Thad would also reduce fixed expenses to $667,000 by reducing advertising expenses, but he still hopes to sell 200 units per year. d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) 4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this 1 Chapter 5: Applying Excel 3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 0.000 units 550 per unit $30 per unit $500,000 (a) What is net operating income (Negative amount should be indicated by a minus sign.) et operating income (b) By what percentage did the net operating income increase? ncrease in net operating income 5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for S15,000 and at that price, Thad estimates 200 units would be sold each year, The variable cost to produce and sell the cycles would be $10,500 per unit. The annual ficed cost would be S855,000 a. What is the break-even in unit sales? ak-even in unit sales b. What is the margin of safety in dolars? Margin of safety in C. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Westem Hombre would have to be reduced to $12,500 to compete effectively. In that event Thad would also reduce fixed expenses to $667,000 by reducing advertising expenses, but he still hopes to sell 200 units per year. d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.)
