0 Try Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,125,000 each month plus variable expenses of $4.50 per carton of calendars. Of the variable expense, 66% is cost of goods sold, while the remaining 34% relates to variable operating expenses. The company sells each carton of calendars for $19.50 Read the requirements. - X Requirement 1. Compute the number of cartons of calendars that Try Spirit Calendars must sell each month to breakeven. Begin by determining the basic income statement equation. Requirements Sales revenue Variable expenses Fixed expenses = Operating income Using the basic income statement equation you determined above solve for the number of cartons to break even. The breakeven sales is cartons Requirement 2. Compute the dollar amount of monthly sales Try Spirit Calendars needs in order to earn $338,000 in operating income. Begin by determining the formula 1. Compute the number of cartons of calendars that Try Spirit Calendars must sell each month to break even. 2. Compute the dollar amount of monthly sales that the company needs in order to earn $338,000 in operating income (round the contribution margin ratio to two decimal places) 3. Prepare the company's contribution margin income statement for June for sales of 470,000 cartons of calendars. 4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales? 5. By what percentage will operating income change if July's sales volume is 13% higher? Prove your answer. Fixed expenses Target operating income Contribution margin ratio Target sales in dollars (Round the contribution margin ratio to two decimal places.) The monthly sales needed to earn $338,000 in operating income is Requirement 3. Prepare the company's contribution margin income statement for June for sales of 470,000 cartons of calendars. Print Done Try Spirit Contribution Margin Income Statement Month Ended June 30 Sales revenue Cost of goods sold Contribution margin Operating expenses Contribution margin Fixed expenses Operating income Choose from any list or enter any number in the input fields and then continue to the next question. Requirement 4. What is June's margin of safety in dollars)? What is the operating leverage factor at this level of sales? Begin by determining the formula x Requirements Sales revenue Sales revenue at breakeven = Margin of safety in dollars) The margin of safety is What is the operating leverage factor at this level of sales? Begin by determining the formula. Contribution margin = Operating income Operating leverage factor 1. Compute the number of cartons of calendars that Try Spirit Calendars must sell each month to break even. 2. Compute the dollar amount of monthly sales that the company needs in order to earn $338,000 in operating income (round the contribution margin ratio to two decimal places). 3. Prepare the company's contribution margin income statement for June for sales of 470,000 cartons of calendars. 4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales? 5. By what percentage will operating income change if July's sales volume is 13% higher? Prove your answer. (Round the operating leverage factor to three decimal places.) The operating leverage factor is Requirement 5. By what percentage will operating income change if July's sales volume is 13% higher? Prove your answer. (Round the percentage to two decimal places If volume increases 13%, then operating income will increase %. Print Done Prove your answer. (Round the percentage to two decimal places.) Original volume (cartons) Add: Increase in volume New volume (cartons) Multiplied by: Unit contribution margin New total contribution margin Less: Fixed expenses New operating income vs. Operating income before change in volume Increase in operating income Percentage change Choose from any list or enter any number in the input fields and then continue to the next