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: A B C 1 Chapter 5: Applying Excel 2 3 Data 4 Unit sales 72,000 units 5 Selling price per unit $ 20 per unit 6 Variable expenses per unit $ 14 per unit Fixed expenses $ 180,000 (a) What is net operating income? (Negative amount should be indicated by a minus sign.) Q Search L ( DELLO Required information b. What is the margin of safety in dollars? Margin of safety in dollars c. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling for the Western Hombre would have to be reduced to $8,400 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,183,000 by reducing advertising expenses, but he still hopes to sell 500 units per year. d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) Q Search DELLFormat Clipboard IN Font Alignment Number C35 A B C D E F 3 Data 4 Unit sales 20,000 units 5 Selling price per unit $60 per unit 6 Variable expenses per unit $45 per unit 7 - Fixed expenses $240,000 8 9 Enter a formula into each of the cells marked with a ? below 10 Review Problem: CVP Relationships 11 12 Compute the CM ratio and variable expense ratio 13 Selling price per unit $60 per unit 14 Variable expenses per unit 45 per unit 15 Contribution margin per unit $15 per unit 16 17 CM ratio 25% 18 Variable expense ratio 75% 19 20 Compute the break-even 21 Break-even in unit sales 16,000 units 22 Break-even in dollar sales $960,000 23 24 Compute the margin of safety 25 Margin of safety in dollars $240,000 26 Margin of safety percentage 20% 27 28 Compute the degree of operating leverage 29 Sales $1,200,000 30 Variable expenses 900,000 31 Contribution margin 300,000 32 Fixed expenses $240,000 33 Net operating income $ 60,000 Chapter 5 Form + Ready Accessibility: Good to go\fThad 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 Western Hombre would have to be reduced to $8,400 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,183,000 by reducing advertising expenses, but he still hopes to sell 500 units per year. d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) Net operating income (loss) Q Search DELL prt se home end insert F3 DI FA F5 F7 F8 F9 F10 FO