Required Information Chapter 6: Applying Excel Excel Worksheet (Part 1 of 2) (Algo) Step to Download the Applying Excel form located on the len-hand side, under flies. If you have trouble, the file is also located in D2L under Course Files and Resources Step 2: Then enter formules in all cells that contain question marks. For example, in cell B13 enter the formula B5 Alter entering formulas in all the cells that contained question marks, verify that the dollar amounts match the example in the text. Step 3: Check your worksheet by changing the fixed expenses to $270,000. 1 your worksheet is operating properly. the degree of operating leverage should be 10. you do not get this answer, find the errors in your worksheet and correct them Step 4: Proceed to the requirements below only after completing your worksheet as it will be used to answer the following questions 2. Change all of the numbers in the data area of your worksheet so that it looks like this: B A 1 Chapter 6: Applying Excel 2 3 Data 70 per 4 Unit sales 5 Selling price per unit 6 7 Variable expenses per unit Faced expenses 10,000 units $ unit $ 42 per unit $ 252.000 your formulas are correct, you should get the correct answers to the following questions (a) What is the break even in dollar sales? Break-even in dollar sales What is the margin of safety percentage? Margin of safety percentage What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating 3. Using the degree of operating leverage and without changing anything in your worksheet calculate the percentage change in net operating income frit sales increase by 20% Percentage increase in net operating income 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: B A 1 Chapter 6: Applying Excel 3 Data 12.000 units $ 70 Per unit Unit Sales 5 Selling price per unit Variable expenses per unit Fixed expenses 42 $ per $ 252,000 unit (a) What is net operating income? (Negative amount should be indicated by a minut sign. Net operating income (los) (5) By what percentage did the net operating income increase? Percentage increase in net operating Income 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 200 units would be sold each year. The variable cost to produce and sell the orcies would be 57.500 per unit. The annual fixed cost would be $375,000 a What is the break-even in unt sales? Break-even in unit sales b. What is the margin of safety in dollars? Margin of safety in dollars c. What is the degree of operating leverage? (Round your answer to 2 decimal places) Degree of operating leverage donians c. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $8,500 to compete effectively. In the event, Thad would also reduce fixed expenses to $293,000 by reducing advertising expenses, but he still hopes to sell 200 units per year d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) Net operating income (los) A B D E 1 Chapter 6: Applying Excel 2 3 Data 4 Unit sales 10,000 units 5 Selling price per unit $70 per unit 6 Variable expenses per unit $42 per unit 7 Fixed expenses $252,000 8 9 Enter a formula into each of the cells marked with a ? below 10 Review Problem: CVP Relationships 11 12 Compute the CM ratio and variable expense ratio 13 Selling price per unit ? per unit 14 Varable expenses per unit 2 per unit 15 Contribution margin per unit 2 per unit 16 17 CM ratio ? 18 Variable expense ratio ? 19 20 Compute the break-even 21 Break-even in unit sales 7 units 22 Break-even in dollar sales ? 23 24 Compute the margin of safety 25 Margin of safety in dollars ? 26 Margin of safety percentage ? 27 28 Compute the degree of operating leverage 29 Sales ? 30 Variable expenses 31 Contribution margin ? 32 Fixed expenses 2 33 Net operating income 2 34 35 Degree of operating leverage ? 36 37 38 39 40 41 42 43 celo ? Chapter 6 Form Ronde