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Question 4 Rainbow Paints label, it is purchased Paints, is studying the advisability of opening another store. His estimates of monthly costs for the operates
Question 4 Rainbow Paints label, it is purchased Paints, is studying the advisability of opening another store. His estimates of monthly costs for the operates a chain of retail paint stores. Although the paint is sold under the Rainbow from an independent paint manufacturer. Guy Walker, president of Rainbow proposed location are as follows Fixed costs Occupancy costs Salaries Other $ 3,160 3,640 1,200 Variable costs (including cost of paint) 6 per gallon Although Rainbow stores sell several different types of paint, monthly sales revenue consistently averages $10 per gallon sold Required a. Compute the contribution margin b. Compute the contribution margin per unit c. Compute the contribution margin ratio d. Compute the break even point in dollar sales for the proposed store e. Compute the break-even point in gallons sold for the proposed store f. Walker thinks that the proposed store will sell between 2,200 and 2,600 gallons of paint per month. Compute the amount of operating income that would be earned per month at each of these sales volumes
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