B D E F G H 1 J K CVP Modeling protect 5 6 7 8 9 10 The purpose of this project is to give you experience creating a multiproduct profitability analysis that can be used to determine the effects of changing business conditions on the client's financial position. Your goal will be to use Excel in such a way that any changes to the assumptions will correctly ripple through the entire profitability analysis. If executed properly, the client should be able to use this spreadsheet over and over, using different "what if" assumptions. Business Description 11 12 13 After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product 1: "Launch-it- a tennis ball thrower that will sell for $11. Product 2: "Treat-time"-an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $31. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Costs: Jake has hired an employee to work the trade show booths. The work contract is $1,600 per month plus a commission equal to 10% of revenue. Jake will also spend $800 per month on trade-show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-ts cost $1 each; Treat times cost $7 each. Shipping and handling on the launch-its will cost $2 each; Shipping and handling on the Treat-times, which are heavier, will cost $8 each. The shipping and handling costs will be paid by Jake, not the customer Assume Jake expects to sell 200 Launch-its and 100 Treat-times during his first month of operations (June). Jake's financial goal is to earn an operating income of $10,000 per month may grow at a rate of 5% a month He believes volume + U v w Blections You have been hired by Jake to build a CVP model that will help him understand the impact of business conditions on his operating income. (See "starting File worksheet.) in your model, all of the original assumptions will be listed in one area of the spreadsheet blue box). All other calculations in the model will reference the assumptions (blue box) such that if any assumption changes, the effect wil ripple through the entire model. To accomplish this goal, you will use FORMULAS, rather than numbers in every other cell in the worksheet. In other words, the only place you wiltype numbers is the blue assumptions box FORMATTING conventions to use throughout proiesti Round all UNITS to the nearest whole unit. Use the decrease decimals" button on your toolbar rather than the Rounding function - Show al MONETARY amounts as dollars and cents. Round to the nearest central. Use the decrease decimals" button rather than the rounding function Show al percentages as not as decimals. (not) Right justify al cells numbers should be to the right side of the cell not in the middle or left) 1) Complete the assumptions(blue box) based on the data about Jake's business Identify and list all variable costs separately and all fixed costs separately before finding the total for each type of cost. 2) Complete the Product Analysis yellow boxes assuming lake ONLY sells either Product #1 (unch-its) OR Product 12 (Treat times) Check figures: B/E Product A1 - 348 units BVE Product 12- 186 units 3) Complete the proforma CM Income Statement for the month of June (green box. HNT: On product line income statements such as this, the fixed costs are only listed in the total column. Make sure you also show the totals for all other line items. Finally, calculate the overall WACMX for the company I Check figure: Operating income $270 WACMX. SON 4) Cakulate the weighted average contribution margin (WACM per unit in orange boxl Check figurer WACM/unit-$8.9 S) Use the WACM/unit to calculate the TOTAL Rumber of units needed to breakeven (TOTAL column in the first gray box). THEN, calculate the number of EACH type of product needed to breakeven. Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in total Check figures: B/E Product #1 = 180, B/E Product #2-90 6) Use the WACM/unit to calculate the total number of units needed to achieve Jake's target profit (TOTAL column in the second gay box). THEN, calculate the number of EACH type of product needed to achieve the target profit. Finally, calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total Check figures: Number of units of Product 1 -929; Number of units of Product 2= 464 71 Calculate the MOS using june sales as the expected sales purple boul. Calculate the MOS in terms of sales revenue and as a percentage. Also calculate the current operating leverage factor (round to the nearest 2 decimal places and use it to determine the expected percentage change in operating income stemming from an expected change in sales volume Check figures: MOSX10N Degree of Operating leverage factor 9.89 8] Change name of worksheet to "Original Assumptions". 9 Make sure you have cleaned up your worksheet using the formatting conventions listed above So Go to the "Advising client" worksheet and folow the directions found there 11) Chick to make sure you have done everything on the grading rubric. Upload your file to canvas when you are finished Grading Rubric + B 1 Format U = Marge Carter $. Condial Format Formatting Table Cell Stres Date Femme x fo A 9 D E ASSUMPTIONS aree 69 Proda Sale priceperunt Wate se supplies Prs Fontanerplate For the month 31 Un CM CUN brever post: 11 1 2 1.3 How 15 34 30 Is Lopen Catarin ETER 234 120 1380 3100 1810 2290 Totalvarece 4.1 Twith - Heseve 5100 2630 26 240E 210 Monthly volume 3 3 1.297 19.682.54 gewig Tere WAOM SEN PER Salarice per Variable per Proda 1 Then 5 12.90 48 Calculation of Copen 3.1 CMN Sport Inuts 15 181 185 5 TEE.00 691 EN Tatawan ME Softssodales C 12 33% 1980 LOON 3 [Martthrashime provote: WSW Red Casper month in 56124 29 51.3L as LOS 2436 Total Matraduct JIR 27 10 are pro month LG.000 South Rapected charain SX Morena 33 SMALHERCHE Droit 34 15 Marino 31 an Lothardin TIKI 47 43 Buscacions + Startnere Adet Grad Rubio Ready MacBook Pro EXCEL HINT: To copy an entire worksheet, right click of the screen and choose "Move or Copy". Then chec have the copy, choose "rename". NEW Once you have built the model, use it to answer Jake's questions about his business. Treat each situation as a separate scenario. All comparisons should be made to the original assumptions. 1. Save a copy of your original model to a new spreadsheet called "supplier cost increase". Say the supplier is expected to increase the cost of the products by 20%. What is the new operating income? What is the new WACM%? What is the new MOS%? Briefly explain your findings to the client. Operating income WACM percentage MOS% Operating income WACM/unit 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say the monthly sales volume is now expected to be 125"Launch-its" and 175 "Treat-times" and (same total units, but a different sales mix). What is the new operating income? What is the new WACM/unit? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. Units to earn target profit Operating income Operating leverage factor 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $2,000 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. Expected % change in op inc CVP Modeling project The purpose of this project is to give you experience creating a multiproduct profitability analysis that can be used to determine the effects of changing business conditions on the client's financial position. Your goal will be to use Excel in such a way that any changes to the assumptions will correctly ripple through the entire profitability analysis. If executed properly, the client should be able to use this spreadsheet over and over, using different "what if" assumptions. Business Description After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product 1: "Launch-it". a tennis ball thrower that will sell for $11. = Product 2: "Treat-time" an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $31. Costs: Jake has hired an employee to work the trade show booths. The work contract is To $ per month on trade show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-its cost $1 each; Treat-times cost $7 each. Shipping and handling ont Launch-its will cost $2 each; Shipping and handling on the Treat-times, which are heavier, will cost $8 each. The shipping and handling costs will be paid by Jake, not the customer. Assume Jake expects to sell 200 Launch-its and 100 Treat-times during his first month of operations (June). Jake's financial goal is to earn an operating income of $10,000 per month. He believes volume may grow at a rate of 5% a month. Directions You have been hired by lake to build a CVP model that will help him understand the impact of business conditions of operating income (See "Starting File worksheet.) in your model, of the original assumptions will be listed in one the spreadsheet (bluebox) All other calculations in the model will reference the assumptions (blue box) such that it assumption changes, the effect will ripple through the entire model. To accomplish this goal, you will use FORMULA rather than numbers, in every other cell in the worksheet. In other words, the only place you will type numbers is th assumptions box FORMATTING conventions to use throughout project: Round all UNITS to the nearest whole unit. Use the "decrease decimals" button on your toolbar rather than the Rounding function - Show all MONETARY amounts as dollars and cents. Hound to the nearest cent. $x.xx). Use the "decrease decimals" button rather than the rounding function. - Show all percentages as %, not as decimals. (xx, not.) - Right justify all cells numbers should be to the right side of the cell, not in the middle or left) 1) Complete the assumptions (blue box) based on the data about Jake's business. Identify and list all variable costs separately and all fixed costs separately before finding the total for each type of cost. 2) Complete the Product Analysis (yellow boxes) assuming Jake ONLY sells either Product #1 Launch-its) OR Product (Treat-times) Check figures: B/E Product 348 units; B/E Product #2-186 units 3) Complete the pro forma CM Income Statement for the month of June (green box). HINT: On product line income statements such as this, the fixed costs are only listed in the total column. Make sure you also show the totals for all fine items. Finally, calculate the overall WACM% for the company. Check figure: Operating income = $270 WACM% = 50% 4) Calculate the weighted average contribution margin (WACM) per unit (in orange box). Check figure: WACM/unit = $8.9 5) Use the WACM/unit to calculate the TOTAL number of units needed to breakeven (TOTAL column in the first gray THEN, calculate the number of EACH type of product needed to breakeven. Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in total. Check figures: B/E Product #1 = 180; B/E Product #2=90 6) Use the WACM/unit to calculate the total number of units needed to achieve Jake's target profit (TOTAL columni second gray box). THEN, calculate the number of EACH type of product needed to achieve the target profit. Finally calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total Check figures: Number of units of Product #1 929; Number of units of Product #2464 7) Calculate the MOS using June sales as the expected sales (purple box). Calculate the MOS in terms of sales revenu as a percentage. Also calculate the current operating leverage factor (round to the nearest 2 decimal places) and us determine the expected percentage change in operating income stemming from an expected change in sales volume CVP Model Launch-it Launch-it ASSUMPTIONS Product #1: Sales price per unit Variable costs per unit: Product 1 Unit CM CM % Breakeven point: in units in sales revenue Total variable cost per unit Target profit volume: in units -in sales revenue Monthly volume Treat-time Product #2: Sales price per unit Variable costs per unit: Treat-time Product #2 Unit CM CM % Breakeven point: -in units -in sales revenue Total variable cost per unit Monthly volume Target profit volume: -in units -in sales revenue Fixed costs per month: Total fixed costs per month Target profit per month Expected change in volume %) CVP Model Jake's Pet Supplies Pro Forma Contribution Margin Income Statement For the month ending June 30 Total Product 2 Product #1 Sales revenue Less: variable expenses Contribution margin less: fixed expenses Operating Income WACM X Total Calculation of Weighted average CM per unit Product #1 Product #2 CM/unit Sales mix # of units sold of each) Contibution margin WACM/unit Product #1 Product #12 Total Multiproduct eakeven point: -in units Sales revenue at breakeven Product #1 Product #2 Total Multiproduct Target profit point: in units Sales revenue at target profit Margin of Safety (in $) Margin of Safety % Degree of Operating Leverage Expected % change in operating income (%) EXCEL HINT: To copy an entire worksheet, right click of the screen and choose "Move or Copy". Then chec have the copy, choose "rename". NEW Once you have built the model, use it to answer Jake's questions about his business. Treat each situation as a separate scenario. All comparisons should be made to the original assumptions. 1. Save a copy of your original model to a new spreadsheet called "supplier cost Operating income increase". Say the supplier is expected to increase the cost of the products by 20% What is the new operating income? What is the new WACM%? What is the new MOS%? WACM percentage Briefly explain your findings to the client. MOS% weighted average Untribution margin sattey 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say Operating income the monthly sales volume is now expected to be 125"Launch-its" and 175 "Treat-times" and (same total units, but a different sales mix). What is the new operating income? WACM/unit What is the new WACM/unit? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. Units to earn target profit margin Operating income Operating leverage factor 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $2,000 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. Expected % change in op inc B D E F G H 1 J K CVP Modeling protect 5 6 7 8 9 10 The purpose of this project is to give you experience creating a multiproduct profitability analysis that can be used to determine the effects of changing business conditions on the client's financial position. Your goal will be to use Excel in such a way that any changes to the assumptions will correctly ripple through the entire profitability analysis. If executed properly, the client should be able to use this spreadsheet over and over, using different "what if" assumptions. Business Description 11 12 13 After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product 1: "Launch-it- a tennis ball thrower that will sell for $11. Product 2: "Treat-time"-an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $31. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Costs: Jake has hired an employee to work the trade show booths. The work contract is $1,600 per month plus a commission equal to 10% of revenue. Jake will also spend $800 per month on trade-show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-ts cost $1 each; Treat times cost $7 each. Shipping and handling on the launch-its will cost $2 each; Shipping and handling on the Treat-times, which are heavier, will cost $8 each. The shipping and handling costs will be paid by Jake, not the customer Assume Jake expects to sell 200 Launch-its and 100 Treat-times during his first month of operations (June). Jake's financial goal is to earn an operating income of $10,000 per month may grow at a rate of 5% a month He believes volume + U v w Blections You have been hired by Jake to build a CVP model that will help him understand the impact of business conditions on his operating income. (See "starting File worksheet.) in your model, all of the original assumptions will be listed in one area of the spreadsheet blue box). All other calculations in the model will reference the assumptions (blue box) such that if any assumption changes, the effect wil ripple through the entire model. To accomplish this goal, you will use FORMULAS, rather than numbers in every other cell in the worksheet. In other words, the only place you wiltype numbers is the blue assumptions box FORMATTING conventions to use throughout proiesti Round all UNITS to the nearest whole unit. Use the decrease decimals" button on your toolbar rather than the Rounding function - Show al MONETARY amounts as dollars and cents. Round to the nearest central. Use the decrease decimals" button rather than the rounding function Show al percentages as not as decimals. (not) Right justify al cells numbers should be to the right side of the cell not in the middle or left) 1) Complete the assumptions(blue box) based on the data about Jake's business Identify and list all variable costs separately and all fixed costs separately before finding the total for each type of cost. 2) Complete the Product Analysis yellow boxes assuming lake ONLY sells either Product #1 (unch-its) OR Product 12 (Treat times) Check figures: B/E Product A1 - 348 units BVE Product 12- 186 units 3) Complete the proforma CM Income Statement for the month of June (green box. HNT: On product line income statements such as this, the fixed costs are only listed in the total column. Make sure you also show the totals for all other line items. Finally, calculate the overall WACMX for the company I Check figure: Operating income $270 WACMX. SON 4) Cakulate the weighted average contribution margin (WACM per unit in orange boxl Check figurer WACM/unit-$8.9 S) Use the WACM/unit to calculate the TOTAL Rumber of units needed to breakeven (TOTAL column in the first gray box). THEN, calculate the number of EACH type of product needed to breakeven. Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in total Check figures: B/E Product #1 = 180, B/E Product #2-90 6) Use the WACM/unit to calculate the total number of units needed to achieve Jake's target profit (TOTAL column in the second gay box). THEN, calculate the number of EACH type of product needed to achieve the target profit. Finally, calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total Check figures: Number of units of Product 1 -929; Number of units of Product 2= 464 71 Calculate the MOS using june sales as the expected sales purple boul. Calculate the MOS in terms of sales revenue and as a percentage. Also calculate the current operating leverage factor (round to the nearest 2 decimal places and use it to determine the expected percentage change in operating income stemming from an expected change in sales volume Check figures: MOSX10N Degree of Operating leverage factor 9.89 8] Change name of worksheet to "Original Assumptions". 9 Make sure you have cleaned up your worksheet using the formatting conventions listed above So Go to the "Advising client" worksheet and folow the directions found there 11) Chick to make sure you have done everything on the grading rubric. Upload your file to canvas when you are finished Grading Rubric + B 1 Format U = Marge Carter $. Condial Format Formatting Table Cell Stres Date Femme x fo A 9 D E ASSUMPTIONS aree 69 Proda Sale priceperunt Wate se supplies Prs Fontanerplate For the month 31 Un CM CUN brever post: 11 1 2 1.3 How 15 34 30 Is Lopen Catarin ETER 234 120 1380 3100 1810 2290 Totalvarece 4.1 Twith - Heseve 5100 2630 26 240E 210 Monthly volume 3 3 1.297 19.682.54 gewig Tere WAOM SEN PER Salarice per Variable per Proda 1 Then 5 12.90 48 Calculation of Copen 3.1 CMN Sport Inuts 15 181 185 5 TEE.00 691 EN Tatawan ME Softssodales C 12 33% 1980 LOON 3 [Martthrashime provote: WSW Red Casper month in 56124 29 51.3L as LOS 2436 Total Matraduct JIR 27 10 are pro month LG.000 South Rapected charain SX Morena 33 SMALHERCHE Droit 34 15 Marino 31 an Lothardin TIKI 47 43 Buscacions + Startnere Adet Grad Rubio Ready MacBook Pro EXCEL HINT: To copy an entire worksheet, right click of the screen and choose "Move or Copy". Then chec have the copy, choose "rename". NEW Once you have built the model, use it to answer Jake's questions about his business. Treat each situation as a separate scenario. All comparisons should be made to the original assumptions. 1. Save a copy of your original model to a new spreadsheet called "supplier cost increase". Say the supplier is expected to increase the cost of the products by 20%. What is the new operating income? What is the new WACM%? What is the new MOS%? Briefly explain your findings to the client. Operating income WACM percentage MOS% Operating income WACM/unit 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say the monthly sales volume is now expected to be 125"Launch-its" and 175 "Treat-times" and (same total units, but a different sales mix). What is the new operating income? What is the new WACM/unit? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. Units to earn target profit Operating income Operating leverage factor 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $2,000 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. Expected % change in op inc CVP Modeling project The purpose of this project is to give you experience creating a multiproduct profitability analysis that can be used to determine the effects of changing business conditions on the client's financial position. Your goal will be to use Excel in such a way that any changes to the assumptions will correctly ripple through the entire profitability analysis. If executed properly, the client should be able to use this spreadsheet over and over, using different "what if" assumptions. Business Description After taking business classes, Jake, an avid dog-lover, decided to start selling unique pet supplies at trade shows. He has two products: Product 1: "Launch-it". a tennis ball thrower that will sell for $11. = Product 2: "Treat-time" an automatic treat dispenser that releases a treat when the dog places his paw on the pedal. The treat dispenser will sell for $31. Costs: Jake has hired an employee to work the trade show booths. The work contract is To $ per month on trade show entry fees. Jake is purchasing the products from a supplier in Mexico. Launch-its cost $1 each; Treat-times cost $7 each. Shipping and handling ont Launch-its will cost $2 each; Shipping and handling on the Treat-times, which are heavier, will cost $8 each. The shipping and handling costs will be paid by Jake, not the customer. Assume Jake expects to sell 200 Launch-its and 100 Treat-times during his first month of operations (June). Jake's financial goal is to earn an operating income of $10,000 per month. He believes volume may grow at a rate of 5% a month. Directions You have been hired by lake to build a CVP model that will help him understand the impact of business conditions of operating income (See "Starting File worksheet.) in your model, of the original assumptions will be listed in one the spreadsheet (bluebox) All other calculations in the model will reference the assumptions (blue box) such that it assumption changes, the effect will ripple through the entire model. To accomplish this goal, you will use FORMULA rather than numbers, in every other cell in the worksheet. In other words, the only place you will type numbers is th assumptions box FORMATTING conventions to use throughout project: Round all UNITS to the nearest whole unit. Use the "decrease decimals" button on your toolbar rather than the Rounding function - Show all MONETARY amounts as dollars and cents. Hound to the nearest cent. $x.xx). Use the "decrease decimals" button rather than the rounding function. - Show all percentages as %, not as decimals. (xx, not.) - Right justify all cells numbers should be to the right side of the cell, not in the middle or left) 1) Complete the assumptions (blue box) based on the data about Jake's business. Identify and list all variable costs separately and all fixed costs separately before finding the total for each type of cost. 2) Complete the Product Analysis (yellow boxes) assuming Jake ONLY sells either Product #1 Launch-its) OR Product (Treat-times) Check figures: B/E Product 348 units; B/E Product #2-186 units 3) Complete the pro forma CM Income Statement for the month of June (green box). HINT: On product line income statements such as this, the fixed costs are only listed in the total column. Make sure you also show the totals for all fine items. Finally, calculate the overall WACM% for the company. Check figure: Operating income = $270 WACM% = 50% 4) Calculate the weighted average contribution margin (WACM) per unit (in orange box). Check figure: WACM/unit = $8.9 5) Use the WACM/unit to calculate the TOTAL number of units needed to breakeven (TOTAL column in the first gray THEN, calculate the number of EACH type of product needed to breakeven. Finally, calculate the sales revenue associated with this volume for EACH product, and then the sales revenue to breakeven in total. Check figures: B/E Product #1 = 180; B/E Product #2=90 6) Use the WACM/unit to calculate the total number of units needed to achieve Jake's target profit (TOTAL columni second gray box). THEN, calculate the number of EACH type of product needed to achieve the target profit. Finally calculate sales revenue associated with this volume for EACH product, and then the sales revenue in total Check figures: Number of units of Product #1 929; Number of units of Product #2464 7) Calculate the MOS using June sales as the expected sales (purple box). Calculate the MOS in terms of sales revenu as a percentage. Also calculate the current operating leverage factor (round to the nearest 2 decimal places) and us determine the expected percentage change in operating income stemming from an expected change in sales volume CVP Model Launch-it Launch-it ASSUMPTIONS Product #1: Sales price per unit Variable costs per unit: Product 1 Unit CM CM % Breakeven point: in units in sales revenue Total variable cost per unit Target profit volume: in units -in sales revenue Monthly volume Treat-time Product #2: Sales price per unit Variable costs per unit: Treat-time Product #2 Unit CM CM % Breakeven point: -in units -in sales revenue Total variable cost per unit Monthly volume Target profit volume: -in units -in sales revenue Fixed costs per month: Total fixed costs per month Target profit per month Expected change in volume %) CVP Model Jake's Pet Supplies Pro Forma Contribution Margin Income Statement For the month ending June 30 Total Product 2 Product #1 Sales revenue Less: variable expenses Contribution margin less: fixed expenses Operating Income WACM X Total Calculation of Weighted average CM per unit Product #1 Product #2 CM/unit Sales mix # of units sold of each) Contibution margin WACM/unit Product #1 Product #12 Total Multiproduct eakeven point: -in units Sales revenue at breakeven Product #1 Product #2 Total Multiproduct Target profit point: in units Sales revenue at target profit Margin of Safety (in $) Margin of Safety % Degree of Operating Leverage Expected % change in operating income (%) EXCEL HINT: To copy an entire worksheet, right click of the screen and choose "Move or Copy". Then chec have the copy, choose "rename". NEW Once you have built the model, use it to answer Jake's questions about his business. Treat each situation as a separate scenario. All comparisons should be made to the original assumptions. 1. Save a copy of your original model to a new spreadsheet called "supplier cost Operating income increase". Say the supplier is expected to increase the cost of the products by 20% What is the new operating income? What is the new WACM%? What is the new MOS%? WACM percentage Briefly explain your findings to the client. MOS% weighted average Untribution margin sattey 2. Save a copy of your original model to a new spreadsheet called "new sales mix". Say Operating income the monthly sales volume is now expected to be 125"Launch-its" and 175 "Treat-times" and (same total units, but a different sales mix). What is the new operating income? WACM/unit What is the new WACM/unit? Given this sales mix, how many units (in total) will Jake need to sell to earn his target profit? Briefly explain your findings to the client. Units to earn target profit margin Operating income Operating leverage factor 3. Save a copy of your original model to a new spreadsheet called "alternative contract". Say Jake's employee wanted to negotiate a different work contract: $2,000 per month plus 5% of revenue. Given his original sales volume and mix, how would this contract have changed Jake's operating income? What is the new operating leverage factor? What is the new expected percentage change in operating income if volume increases as expected in the future? Briefly explain your findings to the client. Expected % change in op inc