E Homework: EXTRA CREDIT ASSIGNMENT--Chapter 7 Question 1, P7-69A (sim... Part 5 of 11 > HW Score: 20.51%, 3.08 of 15 points Points: 3.08 of 15 Save College Rock Calendars imprints calendars with college names. The company has fixed expenses of $1,125,000 each month plus variable expenses of $4.50 per carton of calendars. Of the variable expense, 71% is cost of goods sold, while the remaining 29% relates to variable operating expenses. The company sells each carton of calendars for $19.50. Read the requirements The breakeven sales is 75,000 cartons Requirement 2. Compute the dollar amount of monthly sales College Rock Calendars needs in order to earn $338,000 in operating income. Begin by determining the formula Fixed expenses Target operating income ) + Contribution margin ratio = Target sales in dollars - X Requirements (Round the contribution margin ratio to two decimal places.) The monthly sales needed to earn $338,000 in operating income is $ 1,900,000 Requirement 3. Prepare the company's contribution margin income statement for June for sales of 485,000 cartons of calendars. College Rock Contribution Margin Income Statement Month Ended June 30 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 $338,000 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 485,000 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 12% higher? Prove your answer. Sales revenue 9457500 Variable expenses: Cost of goods sold 1636875 545625 2182500 Operating expenses Contribution margin 7275000 1125000 Print Done Fixed expenses Operating income 6150000 Help me solve this Video Get more help Clear all Check