ANSWER THE FOLLOWING QUESTIONS BASED ON EXHIBIT 2: a. If you know that 100% of costs were variable, how much of the sales increase is due to price and how much is due to volume? Explain. ANSWER THE FOLLOWING QUESTIONS BASED ON EXHIBIT 4 b. What would operating margin be in 2015 if sales went up 4%, all attributable to volume growth? Show work. Assume operating expenses are fixed. c. What would operating margin be in 2015 if sales went up 4%, all attributable to price increases? Show work. d. On what section of the Cash Flow statement would the following items appear? Deprecation Increase in inventory Capital Expenditures Issuance of Debt EXHIBIT 2 Revenues COGS Gross Profit Operating Exenses Operating Income Interest Expense Income Before Taxes Income Tax Net Income 2014 19,500 10,500 9,000 4,227 4,773 1,840 2,933 733 2,200 2015 20,475 11,000 9,475 4,624 4,851 1,760 3,091 773 2,318 EXHIBIT 4 2014 REVENUES VARIABLE COGS FIXED COGS OPERATING EXPENSES 5,000 3,500 500 400