Question

Answer is complete and correct. Percentage increase in net operating 80 % 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: Chapter 5: Applying Excel Data 96.000 units Selling price per unit 50 per unit 6 Variable expenses per un 20 per unit Fored expenses (a) What is net operating income? (Negative amount should be indicated by a minus sign.) Net operating income (loss)

Answer 1

Answe 4	Data
	Unit Sales	96000	Unit
	Selling price $ /Unit (a)	50
	Variable cost $ /Unit (b)	20
	Contribution $/ Unit (a-b)	xx30
	Contribution $	28,80,000	A
	(Rate / Unit * No Of units )
	Less Fixed cost $	18,00,000	B
	Net Profit $	10,80,000	(A-B)
Answe 5	Thad Morgan case analysis
	Need to calculated Break Even Point
	Contribution per Unit
	Selling price $/ Unit	15,000
	Less - Variable cost$/ unit	11,250
	Contribution$ per Unit	3,750	B
	Fixed cost $	27,00,000	A
	Number of Unit ( break Even Point)	720	(A/B)
	Margin of safety Calculation
	Margin of safety =
	Sales Unit	800
	Less -
	Break Even Point Sales	720
	Margin of safety Unit	80
	Margin of safety $	12,00,000	(Margin of safety Unit*Selling Price($/Unit) $80/ unit * 15000
	Degree of Operating leverage
	To calculate Degree of Operating leverage , Need to determined
	Contribution Margin and net Operating Income
	Contribution margin
	Sales Value - Variable cost
	Sales Value =
	Selling price $/ Unit	15,000	a
	Number of Unit	800
	Variable cost$/ unit	11,250	b
	Contribution$ per Unit	3,750	(a-b)=c
	Number of Unit	800	d
	Contrbution $	30,00,000	(c*d)=A
	Less - Fixed cost$	27,00,000	B
	Net Operating Margin $	3,00,000	(A-B)=E
	Degree of Operating leverage
	Contribution/ Net operating Margin		10	Times
	(3000000/300000)

Last part change in Selling price per Unit $13100 / unit with change in Fixed cost $ 2349000 . Company will landed margin loss as below

Selling price $/ Unit	13,100	a
Number of Unit	800
Variable cost$/ unit	11,250	b
Contribution$ per Unit	1,850	(a-b)=c
Number of Unit	800	d
Contribution $	14,80,000	(c*d)=A
Less - Fixed cost$	23,49,000	B
Net Operating Margin( Loss) $	-8,69,000	(A-B)=E