Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

if correct i will thumbs up! Requirements 1. Compute the number of cartons of calendars that College Rock Calendars must sell each month to break

if correct i will thumbs up!
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Requirements 1. Compute the number of cartons of calendars that College 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 $338,000 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 450,000 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 12% higher? Prove your answer. Requirement 1. Compute the number of cartons of calendars that College Rock Calendars must sell each month to breakeven. Begin by determining the basic income statement equation. = 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 College Rock Calendars needs in order to earn $338,000 in operating income. Begin by determining the formula. (Round the contribution margin ratio to two decimal places.) The monthly sales needed to earn $338,000 in operating income is Requirement 3. Prepare the company's contribution margin income statement for June for sales of 450,000 cartons of calendars. Requirement 4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales? Begin by determining the formula. = Margin of safety (in dollars) The margin of safety is What is the operating leverage factor at this level of sales? Begin by determining the formula. (Round the operating leverage factor to three decimal places.) The operating leverage factor is Requirement 5. By what percentige will operating incorne change it Juy's sales volume is 12\%s highter? Prove your arswer. (Round the percentage to two docimal plices) If voume incinases 12%, then operating income wilf increase 98. Prove your arewer. (Round the porcentage to two decirmal places.) Orignal volume (cartone) Add: Increase in volume New volurne (cartons) Multiplied by Uhit contribution margin New total contribution margin Less: Fured expenves Now operating income vs. Operating income before change in volume Increasie in operating income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

6. Identify the belly of the whale in Raiders of the Lost Ark.

Answered: 1 week ago