Nicole Walker owns a small bakery in Georgia. A friend has asked to partner with her in the business. In order to know if she wants to expand the business, Nicole wants to “run” some computations to better understand the existing business.
Budgeted data for the next 12 months includes:
Fixed costs $150,000
Variable costs $425,000
Variable costs will change based on the number of products sold. Use an Excel spreadsheet to compute expected operating income for each of the following scenarios.
A 5% increase in contribution margin, but keeping revenues steady,
A 5% decrease in fixed costs,
A 10% increase in units sold,
A 15% increase in units sold and a 5% increase in fixed cost, and
A 5% decrease in variable costs and a 5% decrease in fixed cost.
Within the Excel spreadsheet, after the above computations, please address the following question: What conclusions can you draw based on the analysis you performed?
Responses should be in complete sentences utilizing proper grammar. Your paper must be formatted according to CSU-Global Guide to Writing and APA Requirements (Links to an external site.).
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