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Good Brew roasts and sells two types of coffee beans primarily in Atlantic Canada: Regular and Espresso Delicio. Because the beans for Espresso Delicio need
Good Brew roasts and sells two types of coffee beans primarily in Atlantic Canada: Regular and Espresso Delicio. Because the beans for Espresso Delicio need to be roasted longer, the additional costs of doing so result in a lower contribution margin relative to the Regular product Good Brew sells. Monthly sales, CM ratios, and the CM per unit for the two products are shown below. Each product is sold in gram bags.
Product
Regular Espresso Delicio
Sales $ $
Variable expense ratio
Contribution margin per unit $ $
The companys fixed expenses total $ per month.
Required:
Prepare a contribution format income statement for the company as a whole.
Compute the overall breakeven point in dollars for the company based on the current sales mix.
Compute the overall breakeven point in total bags of coffee beans both products for the company based on the current sales mix.
Note: Round "Weighted average CM to decimal places. Round your final answers to nearest whole number.
a If sales increase by $ per month, by how much would you expect operating income to increase?
a If sales increase by total bags of coffee beans both products per month, by how much would you expect operating income to increase?
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