Data
								Per unit
						Units		amounts				Total
	Sales					2,400		$75.00				$ 180,000
		Variable manuacturing cost				2,400		$30.00		$ 72,000
		Variable selling				2,400		$ 5.00		$ 12,000		84,000
	Contribution margin							$ 40.00				$ 96,000
		Fixed manufacturing cost								$40,000
		Fixed selling cost								$20,000		60,000
	Operating profit											$ 36,000

1. Using the above data (from Exhibit 9.1 in the book), create a sensitivity analysis of the effect on operating profit of potential changes in demand for HFI, Inc., ranging from a 20 percent decrease to 20 percent increase. Use Exhibits 9.2 and 9.6 as a guide. Per unit selling price Variable cost per unit Total fixed cost Operating profit % change -20% -15% -10% -5% current volume (2019) 5% 10% 15% 20% Units sold 1,920 2,040 2,160 2.280 2,400 2,520 2,640 2,760 2,880 2. Compute the Degree of Operating Leverage at the current sales volume of 2,400 units. DOL @ current sales volume = 3. Using your DOL from #2, compute the operating profit for a 10% decrease in sales from the current sales volume (be sure to verify your answer with the sensitivity analysis in #1) Operating profit assuming 10% decrease in current demand. 4. Use the Goal Seek tool within Excel to determine which sales price would allow HFI to earn $100,000 operating profit. Per unit Units amounts Total Sales $75.00 $ 180,000 2,400 2,400 $ Variable manuacturing cost Variable selling $30.00 5.00 72,000 12,000 2,400 $ 84,000 96,000 Contribution margin $ 40.00 $ Fixed manufacturing cost Fixed selling cost $40,000 $20,000 60,000 36,000 Operating profit $ 1. Using the above data (from Exhibit 9.1 in the book), create a sensitivity analysis of the effect on operating profit of potential changes in demand for HFI, Inc., ranging from a 20 percent decrease to 20 percent increase. Use Exhibits 9.2 and 9.6 as a guide. Per unit selling price Variable cost per unit Total fixed cost Operating profit % change -20% -15% -10% -5% current volume (2019) 5% 10% 15% 20% Units sold 1,920 2,040 2,160 2.280 2,400 2,520 2,640 2,760 2,880 2. Compute the Degree of Operating Leverage at the current sales volume of 2,400 units. DOL @ current sales volume = 3. Using your DOL from #2, compute the operating profit for a 10% decrease in sales from the current sales volume (be sure to verify your answer with the sensitivity analysis in #1) Operating profit assuming 10% decrease in current demand. 4. Use the Goal Seek tool within Excel to determine which sales price would allow HFI to earn $100,000 operating profit. Per unit Units amounts Total Sales $75.00 $ 180,000 2,400 2,400 $ Variable manuacturing cost Variable selling $30.00 5.00 72,000 12,000 2,400 $ 84,000 96,000 Contribution margin $ 40.00 $ Fixed manufacturing cost Fixed selling cost $40,000 $20,000 60,000 36,000 Operating profit $