D E F G H 2 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 3 Key Assumptions 4 Base Case Unit Sales 2000 4000 5600 6800 7400 Unit Sales Scale 5 Factor 100.0% 6 Unit Sales 2000 4000 5600 6800 7400 7 Inflation Rate 2.0% 2.5% 3.0% 3.5% 4.0% 8 Variable Costs per 9 Unit: 10 Direct Labor $3.50 $3.59 $3.70 $3.82 $3.98 11 Materials $2.00 $2.05 $2.11 $2.19 $2.27 12 Selling Expenses $1.20 $1.23 $1.27 $1.31 $1.36 13 Other $0.70 $0.72 $0.74 $0.76 $0.80 Total Variable Cost per 14 Unit $7.40 $7.59 $7.81 $8.09 $8.41 a) Using the Unit Sales Scale Factor, write the formula for the Unit Sales in Year 1 (D6), which will be copied across to H6. (2 points) 6.b) Assuming that all variable costs per unit will increase at the inflation rate each year, write the formula for the Direct Labor cost per unit in Year 2 (E10), which will be copied across and down to H14. (3 points)