Data Table x B 1 Awesome Coffee 2 Contribution Margin Income Statement 3 Month Ended March 31 4 Sales revenue $ 144,000 5 Less variable expenses: 6 Cost of goods sold $ 58,000 7 Marketing expense 11,000 8 General and administrative expense 3,000 72,000 9 Contribution margin $ 72,000 10 Less fixed expenses: 11 Marketing expense $ 33,600 12 General and administrative expense 8,400 42,000 $ Operating income 30,000 13 Print Done The contribution margin income statement of Awesome Coffee for March follows: (Click the icon to view the contribution margin income statement.) Awesome Coffee sells three small coffees for every large coffee. A small coffee sells for $3.00, with a variable expense of $1.50. A large coffee sells for $5.00, with a variable expense of $2.50. Read the requirements. Requirement 1. Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show 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.) ( = 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 Sales price per unit Less: Variable expense per unit Contribution margin Sales mix in units Sales price per unit 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 "O" in the appropriate input field.) Small Large Total Less: The contribution margin income statement of Awesome Coffee for March follows: (Click the icon to view the contribution margin income statement.) Awesome Coffee sells three small coffees for every large coffee. A small coffee sells for $3.00, with a variable expense of $1.50. A large coffee sells for $5.00, with a variable expense of $2.50. Read the requirements. Requirement 1. Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show 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.) ( = 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 Sales price per unit Less: Variable expense per unit Contribution margin Sales mix in units Sales price per unit 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 Less: Less: 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 March contribution margin income statement) to determine its new operating income if sales volume increases 14%. 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.) Awesome Coffee's operating leverage factor is Identify the formula to compute the operating leverage factor. Operating leverage factor (Round your answer to two decimal places.) Awesome Coffee's operating leverage factor is If Awesome Coffee can increase sales revenue by 14%, 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.) Awesome Coffee Effect on Operating Income of 14% Increase in Sales Volume Current level Percent increase Dollar increase Sales revenue 14% Less: Variable expenses 14% 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