The Excel worksheet form that appears below is to be used to recreate Exhibit 2-9. Download the workbook from Connect, where you will also receive instructions about how to use this worksheet.

Required:
1. Check your worksheet by changing the variable selling cost in the Data area to $900, keeping all of the other data the same as in Exhibit 2-9. If your worksheet is operating properly, the net operating income under the traditional format income statement and under the contribution format income statement should now be $700 and the contribution margin should now be $4,700. If you do not get these answers, find the errors in your worksheet and correct them.
How much is the gross margin? Did it change? Why or why not?
2. Suppose that sales are 10% higher as shown below:
Sales .................................................................. $13,200
Variable costs:
Cost of goods sold ............................................... $ 6,600
Variable selling .................................................... $ 990
Variable administrative ............................................ $ 440
Fixed costs:
Fixed selling ..................................................... $ 2,500
Fixed administrative .......................................... $ 1,500
Enter this new data into your worksheet. Make sure that you change all of the data that are different-not just the sales. Print or copy the income statements from your worksheet.
What happened to the variable costs and to the fixed costs when sales increased by 10%? Why? Did the contribution margin increase by 10%? Why or why not? Did the net operating income increase by 10%? Why or why not?

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1Chapter 2: Applying Excel 3Data 4 Sales 5 Variable costs $12000 $6,000 $6D0 6 Cost of goods sold 7 Variable selling 8 Vaiabla administrative 9 Fixed costs 10 Fixed selling 11Fixed administrative 12 13 Entor a formula into each of the cells marked with a? bolow 14 Exhibit 2-9 15 5400 $2,500 $1,500 1Taonal Format Income Statement 17 Sales 18 Cost of goods sold 19 Gross margin 20 Selling and administrative expenses 21 Seling 22 Administrative 23 Net operating income 24 25 Contribution Format Income Statement 26 Sales 27 Variable expenses 28 Cost of goods sold 29 Vanable selling 30 Variable administration 31 Contribution margin 32 Fixed expenses 33 Fixed selling 34 Fixed administrative 35 Net operating income 36 HChapter 2 Form Filed in Chapter 2 R