A B C D Chapter 5: Applying Excel Data Unit sales 20,000 units Selling price per unit $60 per unit Variable expenses per unit $45 per unit Fixed expenses $240,000 Enter a formula into each of the cells marked with a ? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit 60 per unit Variable expenses per unit 45 per unit Contribution margin per unit $240,000 per unit CM ratio 18 Variable expense ratio Enter a formula into each of the cells marked with a? below Review Problem: CVP Relationships Compute the CM ratio and variable expense ratio Selling price per unit 60 per unit Variable expenses per unit Contribution margin per unit 45perunit$240,000perunit CM ratio Variable expense ratio Compute the break-even Break-even in unit sales ? units Break-even in dollar sales ? Compute the margin of safety 25 Margin of safety in dollars Margin of safety percentage ? Compute the degree of operating leverage 9 Sales Variable expenses 31 Contribution margin 32 Fixed expenses Net operating income ??? 35 Degree of operating leverage ? 2. Change all of the numbers in the data area of your worksheet so that it looks like this: If your formulas are correct, you should get the correct answers to the following questions. (a) What is the break-even in dollar sales? Required infomation 4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20%s like this: (a) What is net operating income? (Negative amount should be indicated by a minus sign.) (b) By what percentage did the net operating income increase? Required information 5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930 s. The retro-look cycle would be sold for $15,000 and at that price. Thad estimates 500 units would be sold each year. The variable cost to produce and sell the cycles would be $11,250 per unit. The annual fixed cost would be $1,687,500. a. What is the break-even in unit sales? b. What is the margin of safety in dollars? c. What is the degree of operating leverage? (Round your onswer to 2 decimal ploces.) Thad is worried about the seling price. foumors are circulating that other retto brands of cycles may be revived if so, the seling price for the Western Hombre would have to be reduced to $12.500 to compete effectively in that event. Thad would also reduce fixed expenses to $1,434,500 by reducing advertising expenses, but he stal hopes to sell 500 units per yeat. d. What would the net operating income be in this stuation? (Negntive amount should be indicated by o minus sign.)