Question: 1. Using the data from 2016 in Exhibit 9.1, create an Excel spreadsheet to provide a sensitivity analysis of the effect on operating profit of

1. Using the data from 2016 in Exhibit 9.1, create an Excel spreadsheet to provide a sensitivity analysis of the effect on operating profit of potential changes in demand for HFI, Inc. Use Exhibits 9.2 and 9.6 as a guide. Assume that two-thirds of fixed costs are manufacturing-related; the remaining one-third are selling-related. The variable manufacturing cost per unit is $30, while the variable selling cost per unit is $5. Calculate the DOL for 2016 at a sales volume of 2,400 units. How does this figure help interpret your sensitivity analysis results?

2. Use the Goal Seek tool within Excel to determine the sales price per unit that would allow HFI to earn an operating profit of $100,000, assuming that all the other cost information is the same as in Exhibit 9.1. Use Exhibit 9.5 as a guide.

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