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Please show the formula as well. Thanks! 2) Boneyard Bottles manufacture double-walled bottles and tumbers from surgical-grade stainless steel and titanium. Boneyard Bottles has started
Please show the formula as well. Thanks!
2) Boneyard Bottles manufacture double-walled bottles and tumbers from surgical-grade stainless steel and titanium. Boneyard Bottles has started using the cost-volume-profit them information for planning future operating activity. The following information has been gathered to assist in the preparation of a contribution margin income statement, a traditional cost-volume-profit graph, a CVP staircase diagram, and to calculate breakeven points, targeted profit, margin of safety, and degree of operating leverage. Required: a) Prepare a contribution margin income statement for a single month. i. Prepare a contribution margin income statement for a year. b) Calculate the breakeven points in both sales dollars and unit volume on a monthly basis. c) Calculate the targeted profit goals for both sales dollars and unit volume to generate $425,000 of monthly net operating income. d) Calculate the margin of safety for the targeted profit shown above. e) Calculate the degree of operating leverage at the expected average sales of 18,000 units. f) Use the degree of operating leverage in requirement (e) to estimate the change in net operating income if revenue increases 12.5%Step by Step Solution
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