College Rock Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of $6.50 per carton of calendars. Of the variable expense, 74% is cost of goods sold, while the remaining 26% relates to variable operating expenses. The company sells each carton of calendars for $16.50 Read the requirements. Using the basic micome statement equation you determine above soive on the number of Cantons to break even. The breakeven sales is 109500 cartons Requirements Requirement 2. Compute the dollar amount of monthly sales College Rock Calendars needs in order to earn $308,000 in operating income. Begin by determining the formula. 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 $308,000 in operating income is 2300000 1. Compute the number of cartons of calendars that College Rock Calendars must sell each month to break even. 2. Compute the dollar amount of monthly sales that the company needs in order to earn $308,000 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 450,000 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 16% higher? Prove your answer. Requirement 3. Prepare the company's contribution margin income statement for June for sales of 450,000 cartons of calendars. College Rock Contribution Margin Income Statement Month Ended June 30 Print Done Sales revenue Variable expenses: Cost of goods sold Operating expenses Contribution margin Fixed expenses Operating income Begin by determining the formula Sales revenue Sales revenue at breakeven = Margin of safety (in dollars) Requirements 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 (Round the operating leverage factor to three decimal places.) The operating leverage factor is 1. Compute the number of cartons of calendars that College Rock Calendars must sell each month to break even 2. Compute the dollar amount of monthly sales that the company needs in order to earn $308,000 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 450,000 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 16% higher? Prove your answer. Requirement 5. By what percentage will operating income change if July's sales volume is 16% higher? Prove your answer. (Round the percentage to two de If volume increases 16%, then operating income will increase % Prove your answer. (Round the percentage to two decimal places.) Original volume (cartons) Print Done 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 hoose from any list or any number in the innut fields and then continue to the nort action
