3.15

b. How many hamburgers must Wimpee's sell per month to make $10,500 in operating income? c. Prepare a CVP graph for Wimpee's. d. Assuming that the most hamburgers Wimpee's has ever sold in a month is 24,000, how likely is Wimpee's to achieve a target operating income of $10,500? What actions could Wimpee's manager take to increase the chances of reaching that target operating income? 3.15 (LO 4) Operating leverage Hogue Sports Hut provides individual instruction and coaching to children participating in the city's baseball, softball, basketball, and soccer youth leagues. Last year's results were as follows: Sales revenue $840,000 Variable expenses 546,000 Contribution margin 294,000 Fixed expenses 224,000 Operating income $ 70,000 Required a. What is Hogue Sports Hut's degree of operating leverage? b. If Anna Hogue, the company's president, is successful in increasing sales revenue by 6%, by what percent will the company's operating income increase? c. After achieving the sales increase in part (b), what will be the company's new operating income? d. After achieving the sales increase in part (b), what will be the company's new operating leverage? Round your answer to 2 decimal places. 3.16 (LO 4) Operating leverage Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows: Sales revenue $58,000 Cost of goods sold (all variable) 32,000 Gross margin 26,000 Selling expenses (70% variable ) 8.000