Table 1: Source data for the Dog Product for 2019

Selling price per unit	$260.00
Variable cost of goods sold per unit	$160.00
Fixed manufacturing costs	$8,000,000
Fixed selling and admin costs	$4,000,000
Units produced and sold	200,000

1. The company is also considering an alternative plan whereby products are produced overseas. If the overseas manufacturing in China proceeds, the companys pricing, sales volume and cost are forecast as follows:

Table 2: Chinese manufacturing of Dog Product 2019
Selling price per unit	$260.00
Variable cost of goods sold per unit	$180.00
Fixed manufacturing costs	$4,500,000
Fixed selling and admin costs	$3,500,000
Units produced and sold	200,000

Model this alternate option by extending your existing spreadsheet. Preparing new calculations for the overseas manufacturing option. Locate this new analysis in the columns to the right of your original analysis. As the outsourcing data using an identical format and layout to the original 2019 data, you can simply copy your existing cells from columns B and C to columns E and F, then re-label as needed. The following is an illustrative screenshot that may help you (Note: your figures will be different!). Cell ranges B4-C24 were copied and pasted to E3.

Once you copy your existing cells, you must update all labels and key data.

After copying the existing cells, you must update the key data in cells F3 to F8 to produce correct calculations for the Chinese manufacturing option data from Table 2. As long as you did not hard code any of the data in part (a) within your original formulae, your copied formulas should recalculate correctly.

You do not need to provide full revised income statements to answer these questions. Use your knowledge of operating leverage to recalculate your existing net income figure for each month. See the screenshot below for an illustrative example, that should help you construct the formulas for the domestic option (Note: your figures will be different!).

b.The company is also contemplating producing the Dog product in Poland. The revised cost data for Poland is shown below.

Table 3: Polish manufacturing of Dog Product 2019
Selling price per unit	$260.00
Variable cost of goods sold per unit	$12.00
Fixed manufacturing costs	$145,000
Fixed selling and admin costs	$50,000
Units produced and sold	20,000

Add the third manufacturing location to your existing spreadsheet.

c. At an appropriate place on your worksheet, provide a brief assessment (no more than 150 words) as to whether either overseas manufacturing options should used in 2019. Use the calculations and figures within your Excel worksheet to justify your answer.