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E6-11 Calculating Target Profit, Margin of Safety, Degree of Operating Leverage [LO 6-2, 6-3, 6-4, 6-5] Dana's Ribbon World makes award rosettes. Following is information

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E6-11 Calculating Target Profit, Margin of Safety, Degree of Operating Leverage [LO 6-2, 6-3, 6-4, 6-5] Dana's Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette Sales price per rosette Total fored costs per month 2.00 8.00 6000.00 Required: 1. Suppose Dana's would like to generate a profit of $1,120. Determine how many rosettes it must sell to achieve this target profit. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Target Units 2. If Dana's sells 2,140 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%). Rosettes Margin of Safety (Units) Margin of Safety in Dolars Percentage of Sales 3. Calculate Dana's degree of operating leverage if it sells 2,140 rosettes. (Round your intermediate calculations to 2 decimal places and final answer to 4 decimal places.) Degree of Operating Leverage 4. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 1,819 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%.)) Effect on Profit Contribution Margin Income Statement

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