Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Complete Spreadsheet Please. I think i have everything this time. The contribution margin income statement of Unique Coffee for January follows: (Click the icon to

Complete Spreadsheet Please. I think i have everything this time.

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

The contribution margin income statement of Unique Coffee for January follows: (Click the icon to view the contribution margin income statement.) Unique Coffee sells three small coffees for every large coffee. A small coffee sells for $2.00, with a variable expense of $1.00. A large coffee sells for $6.00, with a variable expense of $3.00. Read the requirements. summary contribution margin income statement at the breakeven level of sales. Show Requirement 1. Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing only two categories of expenses: variable and fixed. Begin by identifying the formula to compute the total breakeven point in units. (Abbreviations used: avg. = Average; CM = Contribution margin.) ( Fixed expenses Operating income ) + Weighed-avg. CM per unit = Breakeven sales in units Now calculate the weighted-average contribution margin per unit. (Round the weighted average contribution margin per unit to the nearest cent.) Small Large Total 2.00 6.00 1.00 3.001 Sales price per unit Less: Variable expense per unit Contribution margin per unit Sales mix in units 1.00 3.00 Contribution margin Weighted-average contribution margin per unit The breakeven point is small cups and large cups of coffee. Prepare a summary contribution margin income statement to prove your answer above. (Complete all input fields. For amounts with a $0 balance, make sure to enter "0" in the appropriate input field.) Small Large Total Sales revenue Less: Variable expenses The contribution margin income statement of Unique Coffee for January follows: (Click the icon to view the contribution margin income statement.) Unique Coffee sells three small coffees for every large coffee. A small coffee sells for $2.00, with a variable expense of $1.00. A large coffee sells for $6.00, with a variable expense of $3.00. Read the requirements. Prepare a summary contribution margin income statement to prove your answer above. (Complete all input fields. For amounts with a $0 balance, make sure to enter "0" in the appropriate input field.) Small Large Total Sales revenue Less: Variable expenses Contribution margin Less: Fixed expenses Operating income Requirement 2. Compute the coffee shop's margin of safety in dollars. Identify the formula to compute the margin of safety in dollars. Margin of safety in dollars The margin of safety in dollars is Requirement 3. Use the coffee shop's operating leverage factor (using the January contribution margin income statement) to determine its new operating income if sales volume increases 17%. Prove your results using the contribution margin income statement format. Assume that sales mix remains unchanged. Identify the formula to compute the operating leverage factor. Operating leverage factor (Round your answer to two decimal places.) Unique Coffee's operating leverage factor is If Unique Coffee can increase sales revenue by 17%, keeping the sales mix the same, operating income will be Prepare a summary contribution margin income statement to prove your answer above. (For amounts with a $0 balance, make sure to enter "0" in the appropriate input field.) Unique Coffee Effect on Operating Income of 17% Increase in Sales Volume Current level Percent increase Dollar increase Sales revenue 17% Less: Variable expenses 17% Contribution margin Change in fixed expenses Operating income before sales increase Operating income after sales increase Choose from any list or enter any number in the input fields and then continue to the next question. Data Table - A B 1 Unique Coffee 2 Contribution Margin Income Statement 3 3 Month Ended January 31 $ 82,000 4 Sales revenue 5 Less variable expenses: 6 Cost of goods sold 26,500 7 Marketing expense 10,000 8 General and administrative expense 4,500 41,000 $ 41,000 9 Contribution margin 10 Less fixed expenses: Marketing expense General and administrative expense 11 16,800 12 4,200 21,000 $ 13 Operating income 20,000 Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Organizational Auditing And Assurance In The Digital Age

Authors: Rui Pedro Marques, Carlos Santos, Helena InĂ¡cio

1st Edition

1522573569, 978-1522573562

More Books

Students also viewed these Accounting questions

Question

Explain the role and the importance of L&D in an organisation.

Answered: 1 week ago