Hello, I did fine with chapter 5 however I need help with chapter six excel sheet and questions on the word document.

4 April 14, 2013 Week 4 Homework Chapter 5 (p.211-213: Requirement 1-5) 1. Check your worksheet by changing the fixed expense to $270000. If your worksheet is operating properly, the degree of operating leverage should be 10. If you do not get this answer, find the errors in your worksheet and correct them. How much is the margin of safety percentage? Did it change? Why or Why not? The margin of safety percentage changed by 10%, because there was an increase in fixed expenses by $30,000. 2. Enter the following data from a different company into your worksheet: Unit sales 10,000 units Selling price per unit $1120 per units Variable expenses per unit $72 per unit Fixed expenses $420,000 What is the margin of safety percentage? What is the degree of operating leverage? The margin of safety percentage is down to 4% and the degree of operating leverage is $1.00 dollar. 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 15%. The percentage change in net operating income if unit sales increase by 15% would be as follows: Calculation: $1.00 x 15% = $15.00 4. Confirm the calculations you made in part (3) above by increasing the unit sales in your worksheet by 15. What is the new net operating income and by what percentage did it increase? The new net operating income is now $540,000 and the net operating income increased by 6% percent. 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 $10,000 and at that price, Thad estimates 600 units would be sold each year. The variable cost to produce and sell the cycles would be $7,500 per unit. The annual fixed cost would be $1,200,000. 4 a. What would be the break-even unit sales, the margin of safety in dollars, and the degree of operating leverage? Thad break-even sales would be 480 units, his margin of safety in dollars comes to a total $4,800,000 dollars and the degree of operating leverage at 5 b. Thad is worried about the selling price. Rumors are circulating that other retro bands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $9,000 to compete effectively. In that event, Thad would also reduce fixed expenses by $300,000 by reducing advertising expenses, but he still hopes to sell 600 units per year. Do you think this is a good plan? Explain. Also, explain the degree of operating leverage that appears on your worksheet. I do not think that is a good plan as Thad would not have any net operating income after fixed expenses and contribution margin would equal to zero. With this plan, Thad would have to sale 600 units and have $5,400,000 break-even dollars. Chapter 6 (p.253-254: Requirement 1-3) 1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under adsorption costing for Year 2 should now be $240,000. If it isn't, check cell C41. The formula in this cell should be =IF(C26