I just need the answer to 4b. It made me do two separate excel sheets with different fixed costs so if you can try both and let me know what answers you get for each.
4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this: (a) What is net operating income? (Negative amount should be indicated by a minus sign.) Answer is complete and correct. (b) By what percentage did the net operating income increase? 3 Data 4 Unit sales 20,000 units 5 Selling price per unit $60 per unit 6 Variable expenses per unit $45 per unit 7 Fixed expenses Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit \begin{tabular}{r|r|} $60 & per unit \\ 45 & per unit \\ $15 & per unit \\ \hline \end{tabular} CM ratio Variable expense ratio 25% 75% Compute the break-even Break-even in unit sales Break-even in dollar sales 18,000 units Compute the margin of safety Margin of safety in dollars Margin of safety percentage $1,080,000 Compute the degree of operating leverage Sales Variable expenses Contribution margin Fixed expenses Net operating income Degree of operating leverage \begin{tabular}{r|} \hline 1,200,000 \\ 900,000 \\ \hline 300,000 \\ \hline$270,000 \\ \hline$30,000 \\ \hline \hline \end{tabular} 10.00 3 Data 4 Unit sales 20,000 units 5 Selling price per unit $60 per unit 6 Variable expenses per unit $45 per unit Fixed expenses Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships 12 Compute the CM ratio and variable expense ratio 13 Selling price per unit 14 Variable expenses per unit 15 Contribution margin per unit $60 per unit \begin{tabular}{l|l} 16 & \\ 17 & CM ratio \\ 18 & Variable expense ratio \\ 19 & \\ 20 & Compute the break-even \end{tabular} Break-even in unit sales Break-even in dollar sales 16,000 units Compute the margin of safety Margin of safety in dollars Margin of safety percentage 240,000 20% Compute the degree of operating leverage Sales Variable expenses Contribution margin Fixed expenses Net operating income $1,200,000900,000300,000$240,000$60,000 Degree of operating leverage 5.00