GUNS N ROSES Champ's Posters Champ has an online poster business. Champ currently sells each poster for $35, while each poster has a variable cost of $21. Champ has monthly fixed costs of $7,000. Champ's relevant range is 0 to 2,000 and is currently selling 550 posters. Contribution Margin Income Statement Month Ended August 31 Sales revenue (550 posters * $35 per poster) Less: Variable expenses (550 posters * $21 per poster) Contribution margin Less: Fixed expenses Operating income $ 19,250 11,550 7,700 7,000 $ 700 a. What is Champ's unit contribution margin? b. Calculate Champ's breakeven point in posters? C. Calculate the contribution margin ratio d. Calculate Champ's breakeven point in sales revenue ($) How many Posters does Champ need to sell to earn $4,900 profit? f. How much Sales Revenue does Champ need to generate to earn $4,900 profit? g. In addition to regular posters, Champ starts selling large posters that cost $40, at a sales price $70 per poster. Relative sales mix is 5 regular to 3 large posters (See below). What is the weighted average per basket contribution margin for this sales mix? e. Regular Large Calculating Weighted-Average Contribution Margin per Unit Posters Posters Sales price per unit $ 355 70 Less: Variable cost per unit 21 40 Contribution margin per unit $ 14 S 30 Multiply by: Sales mix (number of units in "basket") 5 a. C. What is the breakeven in sales units (posters)? b. Calculate the weighted average (basket) CM ratio. What is the breakeven in sales revenue ($) h. Assume Champ sells only regular posters. If Champ expects to sell 950 posters, calculate the Margin of Safety a. In units (posters)? b. In revenue ($)? As a percentage (%)? i. At 950 poster sales, what is Champ's Operating Leverage Factor? j. Champ wants to open a kiosk location in the mall. The mall management offers Champ two leasing options (see below). Option 1 has lower fixed costs of $300 rent, but variable cost of $3.50 per poster (profit share/commission). Option 2 has higher fixed costs of $1000 rent, but no variable costs. C. Option 2 Option 1 Variable cost: 10% of sales revenue (= 10%