ACC-202-OL03

Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue $ 125,000 Variable Costs: Cost of Goods Sold $ 32,000 Selling Costs 17,300 Administrative Costs 700 50,000 Contribution Margin 75,000 Fixed Costs: Selling Costs 37,803 Administrative Costs 12,600 50,400 Operating Income $ 24,600 o SH The contribution margin income statement of Too Sweet Donuts for August 2018 follows: B Click the icon to view the contribution margin income statement.) Too Sweet sells five dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements. TUVUWLUILD Contribution Margin Income Statement Plain Filled Net Sales Revenue Total Variable Costs Contribution Margin Fixed Costs Operating Income The contribution margin income statement of Too Sweet Donuts for August 2018 follows: Click the icon to view the contribution margin income statement.) Too Sweet sells five dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements. wwwww Requirement 3. Compute Too Sweet's margin of safety in dollars for August 2018. (The contribution margin income statement provided should be used to determine any expected results.) Margin of safety in dollars Requirement 4. Compute the degree of operating leverage for Too Sweet Donuts. Estimate the new operating income if total sales increase by 40%. (Round the degree of operating leverage to four decimal places and the final answer to the nearest dollar. Assume the sales mix remains unchanged.) Begin by computing the degree of operating leverage for Too Sweet Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX.) Degree of operating leverage Choose from our lint The contribution margin income statement of Too Sweet Donuts for August 2018 follows: Click the icon to view the contribution margin income statement.) Too Sweet sells five dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements. Begin by computing the degree of operating leverage for Too Sweet Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX.) Degree of operating leverage Estimate the new operating income if total sales increase by 40%. (Round interin calculations to four decimal places and your final answer to the nearest dollar. Assume the sales mix remains unchanged.) The estimated operating income will be Requirement 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 40% increase in total sales. (The sales mix remains unchanged.) Too Sweet Donuts Requirement 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 40% increase in total sales. (The sales mix remains unchanged.) Too Sweet Donuts Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income 1. Calculate the weighted-average contribution margin. 2. Determine Too Sweet's monthly breakeven point in dozens of plain donuts and custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of costs: variable and fixed. 3. Compute Too Sweet's margin of safety in dollars for August 2018. 4. Compute the degree of operating leverage for Too Sweet Donuts. Estimate the new operating income if total sales increase by 40%. (Round the degree of operating leverage to four decimal places and the final answer to the nearest dollar. Assume the sales mix remains unchanged.) 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 40% increase in total sales. (The sales mix femains unchanged.) -il so