Please include excel formulas and cell referencing

B E F H J M N o O P 1 2 The following monthly data are available for the Gilligan Company and its only product, Product ECS: Sales units 400 4 5 6 7 8 9 10 Sales Variable expenses Contribution Margin Fixed Expenses Operating Income (Loss) $ 111,850 44,000 67,850 52,800 $ 15,050 11 Apply the INCREMENTAL APPROACH (A130 Known As the CONTRIBUTION MARGIN APPROACH) to 12 calculate whether the operating income would increase or decrease) for each of the following four independent 13 considerations from management? If operating income will decrease, please ensure your answer is a negative. (a) An anticipated new business increasing the competition for our product might decrease sales by 10% Decrease sales by 10% 14 15 16 17 18 19 20 21 22 ? Increase (decrease) in operating income (b) Management is contemplating the use of plastic gearing rather than metal gearing in Product ECS. This change would reduce variable costs by $15. The company's marketing manager predicts that this would reduce the overall quality of the product and thus would result in a decline in sales to a level of 350 units Reduce variable costs per unit by Decline in sales to a level of per month. $ 15 23 24 25 26 27 28 29 30 31 Page 1 Increase (decrease) in operating income (c) Management wants to increase sales and feels that this can be done by reducing the selling price by $25 per unit and increasing the advertising budget by $20,000 per month. Management believes that these actions will increase unit sales by 50%. Reduce selling price per unit by 25 Increasing monthly advertising budget by $ 20,000 Increase unit sales by 50% $ 32 33 34 35 36 37 38 39 40 41 ? (d) Increase (decrease) in operating income Management wants to automate a portion of the production process for Product ECS. The new equipment would reduce direct labour costs by $20 per unit but would result in a monthly rental cost for the new robotic equipment of $10,000. Management believes that the new equipment will increase the reliability of Product ECS, thus resulting in an increase in monthly sales of 12%. Reduce labour costs per unit by 20 Monthly rental cost for the new robotic equipment of $ 10,000 Increase in monthly sales of 12% $ 42 43 44 45 46 Increase (decrease) in operating income ? 47 48 49 50 51 52 53 54