COST VOLUME PROFIT ANALYSIS, PART II (contribution margin income statement multiple product CVP operating leverage - constraints) Malarie runs a drink stand where she sells 2 products lemonade and smoothies. The following budgeted information is available per unit of each product: PER UNIT INFORMATION Smoothie $3 .00 Lemonade Selling price $2.00 I I Variable costs I 1.20 I $1.80 Contribution margin $1.4 Malarie has the following fixed costs per season as well: Annual xed costs: Cost of goods sold (depreciation) $250.00 Advertising $100.00 1. Malarie wants to approach her father for money with which to purchase a new deluxe blender. She projects sales for the upcoming season of 300 lemonades and 200 smoothies. Prepare a pro-forma income statement in traditional and contribution-margin formats. WHY is the contribution-margin format better for decision making? 2. Malarie advertises by placing signs at strategic points in business and around the neighborhood. Which product should she emphasize? WHY? 3. What if a Smoothie took 1.5 minutes to make while a Lemonade took only 1 minute to make. Assuming that the blender can only operate for a certain number of hours, would this change your answer to #2? 4. Malarie is exploring the possibility of lowering her price on smoothies to $2.75. If she does this, she estimates that her demand will rise from 200 to 240. If she does this