= Homework: Homework 3 The contribution margin income statement of Extreme Coffee for Octo (Click the icon to view the contribution margin income statement. Extreme Coffee sells three small coffees for every large coffee. A sma Read the requirements. Data table Question 1. P7-72B (similar to) HW Score: 63.96 %, 31.98 of 50 points its: 0.45 of 8 Save - X Extreme Coffee Contribution Margin Income Statement Requirement 1. Determine the coffee shop's monthly breakeven poin Show only two categories of expenses: variable and fixed. Begin by identifying the formula to compute the total breakeven point Fixed expenses Operating Income Now calculate the weighted-average contribution margin per unit. (Ro Sales revenue Less variable expenses: Month Ended October 31 $ 108,000 Cost of goods sold $ 42,000 Marketing expense General and administrative expense Contribution margin 11,000 1,000 54,000 $ 54,000 Less fixed expenses: Small Marketing expense $ Sales price per unit Less: $ Variable expense per unit 2.00 $ (1.00) 24,000 6,000 30,000 General and administrative expense $ 24,000 Operating Income Contribution margin per unit $ 1.00 $ .75 Sales mix in units Sales mix in units Calculator Print Done e expense of $2.00. ribution margin income statement at the breakeven level of sales. Clear all Check answer = Homework: Homework 3 The contribution margin income statement of Extreme Coffee for October follows: (Click the icon to view the contribution margin income statement.) Question 1, P7-72B (similar to) Part 2 of 10 HW Score: 63.96 %, 31.98 of 50 points Points: 0.45 of 8 Save Extreme Coffee sells three small coffees for every large coffee. A small coffee sells for $2.00, with a variable expense of $1.00. A large coffee sells for $4.00, with a variable expense of $2.00. Read the requirements. Requirement 1. Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of expenses: variable and fixed. Begin by identifying the formula to compute the total breakeven point in units. (Abbreviations used: avg. = Average; CM = Contribution n Fixed expenses Operating Income ) Welghed-avg. CM per unit = Breakeven sales in units Requirements Now calculate the weighted-average contribution margin per unit. (Round the weighted-average contribution margin per unit to the neare Small Sales price per unit $ Less: Variable expense per unit 2.00 $ (1.00) Large 4.00 (2.00) Total Contribution margin per unit $ 1.00 $ 2.00 Sales mix in units .75 .25 Sales mix in units 1. Determine the coffee shop's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of expenses: variable and fixed. 2. Compute the coffee shop's margin of safety in dollars. 3. Use the coffee shop's operating leverage factor (using the October contribution margin income statement) to determine its new operating income if sales volume increases 16%. Prove your results using the contribution margin income statement format. Assume that sales mix remains unchanged. Calculator Print Done