Question

Need answers for the highlighted cells in question 1 and 2 (Formula's)
JPL, Inc. has provided its sales and expense data for the most recent period. The Controller has asked you prepare a spreadsheet that shows the related CVP Analysis computations. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. points • Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "=B5” was entered, the formula would output the result from cell B5, or 75 in this example. • Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), * (asterisk sign to multiply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell"=B5+B6” was entered, the formula would add the values from those cells and output the result, or 120 in this example. If using the other math symbols the result would output an appropriate answer for its function. eBook Print

Answer 1

As a rule, only one (1) question can be answered at a time. In case no specific question is requested (maximum of 1), then the first questions is itself only answered.

In the case of JPL Inc.:

1. Compute the CM ratio and variable expense ratio
Selling price per unit (given) (SP)	=B5	per unit		75	per unit
Variable expenses per unit (given) (VC)	=B6	per unit		45	per unit
Contribution margin per unit [CM = (SP-VC)]	=B12-B13	per unit		30	per unit
CM Ratio (CM / SP)	=B14/B12			0.4
Variable expense ratio (VC / SP)	=B13/B12			0.6
2. Compute the break-even point
Break-even in unit sales (BEU = Fixed expenses / CM)	=B7/B14	units		7000	units
Break-even in sales (BE$ = BEU * SP)	=B20*B5			525000
3. Compute Margin of safety
Margin of safety in dollars (MOS $ = Current sales - BE$)	=(B4*B5)-B21			315000
Margin of safety in percentage (MOS $ / Current sales)	=(B24/(B4*B5))*100			37.5
4. Compute degree of operating leverage
Sales	=B4*B5			840000
Variable expenses	=B4*B6			504000
Contribution Margin	=B28-B29			336000
Fixed expense	=B7			210000
Net operating income	=B30-B31			126000
Degree of operating leverage	=B30/B32			2.666667
(Contribution Margin / Net operating income)