Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

help me, please ! Spirit Rock Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of

help me, please ! image text in transcribed
image text in transcribed
Spirit Rock Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of $6.50 per carton of calendars. Of the variable expense, 68% is cost of goods sold, while the remaining 32% relates to variable operating expenses The company sells each carton of calendars for $16.50. Read the requirements. Requirements 1. Compute the number of cartons of calendars that Spirit Rock Calendars must sell each month to break even. 2. Compute the dollar amount of monthly sales that the company needs in order to earn $308,000 in operating income (round the contribution margin ratio to two decimal places) 3. Prepare the company's contribution margin income statement for June for sales of 470,000 cartons of calendars. 4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales? 5. By what percentage will operating income change if July's sales volume is 13% higher? Prove your answer. Requirement 1. Compute the number of cartons of calendars that Spint Rock Calendars must sell each month to breakeven Begin by determining the basic income statement equation Sales-revenue Variable expenses Fixed expenses = Operating income Using the basic income statement equation you determined above solve for the number of cartons to break even The breakeven sales is cartons Requirement 2. Compute the dollar amount of monthly sales Spirit Rock Calendars needs in order to earn $308,000 in operating income. Begin by determining the formula ( Fixed expenses = Target sales in doliars (Round the contribution margin ratio to two decimal places ) The monthly sales needed to earn $308,000 in operating income is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

summarize the history of work psychology;

Answered: 1 week ago