Given the data sheet, can you fill out the Sensitivity Analysis?
Project #2 Sales Projections in Units January February March April May 16,891 47,369 32,260 42,614 62,688 Projected Sales Price/Unit $ 339.00 Monthly Projected Selling & Administrative Expenses Variable Cost/Unit $1.00 Fixed Costs $2,718 Production: Desired Ending Inventory Beginning Inventory (new business) 92.6% Materials Desired Ending Inventory Number of Materials per Unit Projected Cost/Material Unit Beginning Inventory (new business) 85.2% 4.0 $21.00 Direct Labor Time per Unit (in hours) Cost per Hour 1.00 $20.00 Manufacturing Overhead Variable Cost/Unit Fixed Costs $5.00 $7,361 SENSITIVITY ANALYSIS (Print and submit AFTER submitting budget online) Situation #1: What would the effect be on the Projected Operating Income if you decreased your selling price by 7% to match a price change by one of your competitors? January February March Would you recommend this action? Yes No Reasoning/Rationale: Situation #2 What would the effect be on the Projected Operating Income if you decided to improve your product's quality by buying a raw material that cost 15% more than your current material? January February March Would you recommend this action? Reasoning/Rationale: Situation #3 What would the effect be on the Projected Operating Income if you decided to remove executive bonus' and decrease your Selling and Administrative costs by 6%. January February March Would you recommend this action? Yes No Reasoning/Rationale: Project #2 Sales Projections in Units January February March April May 16,891 47,369 32,260 42,614 62,688 Projected Sales Price/Unit $ 339.00 Monthly Projected Selling & Administrative Expenses Variable Cost/Unit $1.00 Fixed Costs $2,718 Production: Desired Ending Inventory Beginning Inventory (new business) 92.6% Materials Desired Ending Inventory Number of Materials per Unit Projected Cost/Material Unit Beginning Inventory (new business) 85.2% 4.0 $21.00 Direct Labor Time per Unit (in hours) Cost per Hour 1.00 $20.00 Manufacturing Overhead Variable Cost/Unit Fixed Costs $5.00 $7,361 SENSITIVITY ANALYSIS (Print and submit AFTER submitting budget online) Situation #1: What would the effect be on the Projected Operating Income if you decreased your selling price by 7% to match a price change by one of your competitors? January February March Would you recommend this action? Yes No Reasoning/Rationale: Situation #2 What would the effect be on the Projected Operating Income if you decided to improve your product's quality by buying a raw material that cost 15% more than your current material? January February March Would you recommend this action? Reasoning/Rationale: Situation #3 What would the effect be on the Projected Operating Income if you decided to remove executive bonus' and decrease your Selling and Administrative costs by 6%. January February March Would you recommend this action? Yes No Reasoning/Rationale
