The chapter 5 form worksheet 2. Change all of the numbers in the data area of yo

Question

The chapter 5 form worksheet
2. Change all of the numbers in the data area of your worksheet so that it looks like this: 1 Chapter 5: Applying Excel 2 3 Data 4 Unit sales 5 Selling price per unit 6 Variable expenses per unit 7 Fixed expenses 30,000 units $60 per unit $42 per unit 486,000 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the break-even in dollar sales? reak-even in dollar les (b) What is the margin of safety percentage? Margin of safety (c) What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage

Explanation / Answer

2] Data: Unit sales 30000 Selling price per unit 60 Variable expenses per unit 42 Fixed expenses 486000 CM ratio and Variable expenses ratio: Selling price per unit 60 Variable explenses per unit 42 Contribution margin per unit 18 CM ratio 0.30 Variable expenses ratio 0.70 Break even: BEP in unit sales 27000 BEP in dollar sales 1620000 [a] Margin of safety: Margin of safety in dollars 180000 Margin of safety in percentage 10% [b] Degree of operating leverage: Sales 1800000 Variable expenses 1260000 Contribution margin 540000 Fixed expenses 486000 Net operating income 54000 Degree of operating leverage 10 [c] 3] Percentage increase in NOI = % increase in sales*DOL= 20*10 =200% 4] Data: Unit sales 36000 Selling price per unit 60 Variable expenses per unit 42 Fixed expenses 486000 CM ratio and Variable expenses ratio: Selling price per unit 60 Variable explenses per unit 42 Contribution margin per unit 18 CM ratio 0.30 Variable expenses ratio 0.70 Break even: BEP in unit sales 27000 BEP in dollar sales 1620000 Margin of safety: Margin of safety in dollars 540000 Margin of safety in percentage 25% Degree of operating leverage: Sales 2160000 Variable expenses 1512000 Contribution margin 648000 Fixed expenses 486000 a] Net operating income 162000 [a] b] % Increase in NOI = (162000-54000)/54000 = 200% 5) Data: Unit sales 400 Selling price per unit 15000 Variable expenses per unit 11250 Fixed expenses 750000 CM ratio and Variable expenses ratio: Selling price per unit 15000 Variable explenses per unit 11250 Contribution margin per unit 3750 CM ratio 0.25 Variable expenses ratio 0.75 Break even: BEP in unit sales 200 [a] BEP in dollar sales 3000000 Margin of safety: Margin of safety in dollars 3000000 [b] Margin of safety in percentage 50% Degree of operating leverage: Sales 6000000 Variable expenses 4500000 Contribution margin 1500000 Fixed expenses 750000 Net operating income 750000 Degree of operating leverage 2 [d[ Sales 5000000 Variable expenses 4500000 Contribution margin 500000 Fixed expenses 570000 Net operating income -70000

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