Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ 27 14 6 1 ta $ 510,000 $ 210,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $60 per unit. Using historical data for future decisions: Assume the information for Years 1, 2 and 3 from CONNECT now represent historical experience. Haas Company can use this information to consider operational changes for Year 4. For Year 4 assume Haas Company will produce and sell the same number of units as they sold in Year 3 from your CONNECT problem (given data). Remember when a company sells the same number of units they produce, product costs equal product expenses and there will be no change to inventory values. 5) Use the variable costing information (given and results) from CONNECT to provide the information required below. Express Net Operating Income in a formula like that used on page 196 of your text. Profit =(unit CM XQ) - Fixed Expenses. Remember to SHOW YOUR WORK!!! a) Sales price per unit b) Variable Expense per unit (include S&A!!) c) Contribution margin per unit d) Contribution margin percent/ratio e) Contribution margin in dollars f) Profit formula NOI = Profit = Q- ; where the first blank is the CM per unit and the second blank is Fixed Expenses Note: Check figures must be supported to earn credit for grading purposes. 12) New Plant? The company is considering construction of a new automated manufacturing plant. the new plant would slash variable expenses by 30% but would cause fixed expenses per year to double. Haas still plans to produce and sell the same number of units in Year 4 (base). a) If the new plant is built, what would be the company's new (i) contribution margin per unit, (i) fixed expenses and (iii) the new profit formula? Complete the table below. i) New CM per unit ii) New Fixed expenses iii) New profit formula New Break-even New Year 4 Units Sales Revenue NOI Note: Check figures must be supported to earn credit for grading purposes. a) Assume Haas sells the same units as planned for Year 4 in the new plant, calculate the new margin of safety in (i) units) (ii) dollars and (iii) percent. Has margin of safety improved or declined? Explain/comment in 10 to 30 words. i) MoS units ii) MoS dollars iii) MoS percent Note: Check figures must be supported to earn credit for grading purposes. b) Calculate the degree of operating leverage. Has operating leverage improved or declined from the "base" calculation in 9)? Discuss in 10 to 30 words. c) If you were a member of top management, would you have been in favor of constructing the new plant? Explain in 10 to 30 words