Question
Danas Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette $ 3.00 Sales price per rosette 6.00 Total fixed
Danas Ribbon World makes award rosettes. Following is information about the company:
Variable cost per rosette | $ | 3.00 |
Sales price per rosette | 6.00 | |
Total fixed costs per month | 6000.00 | |
2. If Danas sells 2,180 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. (Round your Margin of Safety percentage to two decimal places (i.e. .1234 should be entered as 12.34%). MArgin of Safety (Units) Margin of Safety in Dollars Percentage of Sale 3. Calculate Danas degree of operating leverage if it sells 2,180 rosettes. (Round your intermediate calculations to 2 decimal places and final answer to 4 decimal places.) 4. Using the degree of operating leverage, calculate the change in Danas profit if unit sales drop to 1,853 units. Confirm this by preparing a new contribution margin income statement. (Round your intermediate calculations to 4 decimal places and final answer to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))
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