Required information Chapter 1: Applying Excel The Chapter 1 Form worksheet is to be used to create your own worksheet version of Exhibit 1-7 in the te Chapter 1: Applying Excel: Exercise (Part 2 of 2) 1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: B Chapter 1: Applying Excel 1 2 3 Data 4 Sales $ 19,500 5 $ ON 8,000 800 $ 8 Variable costs: Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $ 600 9 10 $ 2,500 1.500 11 $ Required information 2. Suppose that sales are 16% higher as shown below: 1 Chapter 1: Applying Excel Data 4 Sales $ $ 22,620 $ 9,280 $ 5 Variable costs: 6 Cost of goods sold 7 Variable selling 8 Variable administrative 9 Fixed costs: 10 Fixed selling 11 Fixed administrative ol 928 696 on $ 2,500 1,500 $ 0 Required Information If your formulas are correct, you should get the correct answers to the following questions. (a) What is the gross margin now? Gross margin (b) What is the net operating income now? Net operating income (c) What is the contribution margin now? Contribution margin mework Savec Help Save & Exit Check Required Information 2 Gross margin Contribution margin Net operating Income (e) When sales increase by 16%, which of the following should increase by more than 16% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost Fixed cost 2 Gross margin 7 Contribution margin 2 Net operating income Check my Required information (d) When sales increase by 16%, which of the following should also increase by 16% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double c the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2 Variable cost 2 Fixed cost 2 Gross margin Contribution margin Net operating income (e) When sales increase by 16%, which of the following should increase by more than 16% in a merchandising company? [You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) $12,000 Traditional Format Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income $6,000 600 Contributio For $12,000 Sales 6,000 Variable expenses: 6,000 Cost of goods sold Variable selling Variable administrative 5,000 Contribution margin $ 1,000 Fixed expenses: Fixed selling Fixed administrative Net operating income $3,100 1.900 400 7,000 5.000 2,500 1,500 4,000 $ 1.000 For a manufacturing company, the cost of goods sold would include some variable costs, such as direct materials, direct labor, and variable overhead, and some fixed costs, such as fixed manufacturing overhead Income statement formats for manufacturing companies will be explored in greater detail in a subsequent chapter Cost of goods sold Beginning Ending merchandise + Purchases - merchandise inventory Inventory Cost of goods sold Beginning merchandise + Purchases inventory $7,000 + $3,000 $6,000 Ending merchandise inventory $1,000