2 3 Lo-Calorie Doughnuts operates a chain of coffee shops in Southern Alberta. They have provided the following budgeted figures for next year: 4 Units sold 7,750 5 Total Sales $ 9,000,000 6 Fixed Costs $ 2,150,000 7 Variable Costs $ 4,000,000 8 9 a) Calculate the following: (1 mark each = 5 marks total) 10 Contribution margin per unit 11 Breakeven point in units 12 b) Management of the company wants to see what impact changes in costs could have on its operating income. Calculate the budgeted operating income for each option. (7 13 marks) 14 15 16 7 Option 1. Reduce fixed costs by 10%. There is no change to quantity sold, selling price and variable cost per unit. OR Option 2. Refer back to original data (this is independent of the previous option). Reduce variable costs by 5%, there is no change to quantity sold, selling price or fixed costs. 8 Answer the following: