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Chapter 5 Applying Excel (A) i Help Saved Save & Exit Subm Check my work 2 Required information Part 2 of 2 The Chapter 5
Chapter 5 Applying Excel (A) i Help Saved Save & Exit Subm Check my work 2 Required information Part 2 of 2 The Chapter 5 Form worksheet is to be used to create your own worksheet version of the Review Problem example in the text 10 points 2. Change all of the numbers in the data area of your worksheet so that it looks like this: C A B eBook 1 Chapter 5: Applying Excel Print References 3 Data 70,000 units 4 Unit sales 40 per unit Selling price per unit 5 Variable expenses per unit 28 per unit 6 7 Fixed expenses 798,000 Chapter 5 Applying Excel (A) i) Saved 2 Required information Part 2 of 2 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the break-even in dollar sales? 10 points Break-even in dollar sales eBook Print References (b) What is the margin of safety percentage? Margin of safety percentage % (c) What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage points eBook 3. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20 %. Print References Percentage increase in net operating income 10 points 4. Confirm your calculations in Requirement 3 above by increasing the unit sales like this: your worksheet by 20% so that the Data area looks eBook C A Print 1 Chapter 5: Applying Excel References 2 Data 84,000 units 4 Unit sales Selling price per unit 5 40 per unit 6 Variable expenses per unit 28 per unit $798,000 7 Fixed expenses 10 points (a) What is net operating income? (Negative amount should be indicated by a minus sign.) eBook Net operating income (loss) Print References (b) By what percentage did the net operating income increase? Percentage increase 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 $17.000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $11,900 per unit. The annual fixed cost would be $1,530,000. Part 2 of 2 10 a. What is the break-even in unit sales? points Break-even in unit sales eBook Print References b. What is the margin of safety in dollars? Margin of safety in dollars c. What the degree of operating leverage? (Round your answer to 2 decimal places.) Lorge f opeating |leverage Print References 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 Western Hombre would have to be reduced to $14,300 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,362,000 by reducing advertising expenses, but he still hopes to sell 400 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)
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