E6-12 (Algo) Calculating Target Profit, Margin of Safety, Degree of Operating Leverage [LO 6-2, 6-3, 6-4, 6-5] Danas Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette $ 1.80 Sales price per rosette 4.00 Total fixed costs per month 1100.00 Required: 1. Suppose Danas would like to generate a profit of $940. Determine how many rosettes it must sell to achieve this target profit. 2. If Danas sells 890 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Danas degree of operating leverage if it sells 890 rosettes. 4a. Using the degree of operating leverage, calculate the change in Danas profit if unit sales drop to 712 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit.

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: Variable cost per rosette Sales price per rosette Total fixed costs per month $ 1.80 4.00 1100.00 Required: 1. Suppose Dana's would like to generate a profit of $940. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 890 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 890 rosettes. 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 712 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 $940. 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 928