E6-12 (Algo) 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: 2.00 Variable cost per rosette Sales price per rosette Total fixed costs per month 5.00 1500.00 Required: 1. Suppose Dana's would like to generate a profit of $1,000. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 1,500 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana's degree of operating leverage if it sells 1,500 rosettes. 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 1,200 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Req 4B Suppose Dana's would like to generate a profit of $1,000. Determine how many rosettes it must sell to achieve this target profit. (Round your intermediate calculations to 2 decimal places and round your final answer up to nearest whole number.) Target Units Reg1 Req2 > Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3 Req 4A Req 4B If Dana's sells 1,500 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number. Round your Margin of Safety percentage to two decimal places (i.e. 0.1234 should be entered as 12.34%.)) Rosettes Margin of Safety (Units) Margin of Safety in Dollars Percentage of Sales % Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4A Reg 4B Calculate Dana's degree of operating leverage if it sells 1,500 rosettes. (Round your intermediate calculations to 2 decimal places and final answer to 4 decimal places.) Degree of Operating Leverage Complete this question by entering your answers in the tabs below. Req1 Reg 2 Req 3 Req 4A Req 4B Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 1,200 units. (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 % Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req3 Req 4A Req 4B Prepare a new contribution margin income statement to verify change in dana's profit. (Round your answers to nearest whole number.) Contribution Margin Income Statement For 1,200 Rosettes Contribution Margin Income from Operations
