CVP Sensitivity Analysis (Multiple Products). Gonzalez Company produces two different products that have the following monthly data (this is the base case).

	Cruiser	Racer	Total
Selling price per unit	$300	$1,200
Variable cost per unit	$120	$ 720
Expected unit sales	1,400	600	2,000
Sales mix	70 percent	30 percent	100 percent
Fixed costs			$180,000

Required:

For each of the independent situations in requirements b through d, assume that total sales remains at 2,000 units.

Prepare a contribution margin income statement.

Refer to the base case. What would the operating profit be if the Cruiser sales price (1) increases 20 percent, or (2) decreases 20 percent?

Refer to the base case. What would the operating profit be if the Cruiser sales volume increases 400 units with a corresponding decrease of 400 units in Racer sales?

Refer to the base case. What would the operating profit be if total fixed costs increase five percent? Does this increase in fixed costs result in higher operating leverage or lower operating leverage? Explain.