Question Help The contribution margin income statement of Westlake Coffee for August follows: Click the icon to view the contribution margin income statement.) Westlake 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 margin.) Breakeven sales in units Now calculate the weighted-average contribution margin per unit. (Round the weighted average contribution margin per unit to the nearest cent.) Small Large Total Less: Weighted average contribution margin per unit The breakeven point is small cups and large cups of coffee Choose from any list or enter any number in the input fields and then continue to the next question. 24 SW MacBook Air age control anym pel om The breakeven point is small cups and large cups of coffee. Prepare a summary contribution margin income statement to prove your answer above. (Complete all input fields. For amounts with a $0 balance, make sure to enter "O" in the appropriate input field.) Small Large Total Less: Less: Operating income Requirement 2. Compute the coffee shop's margin of safety in dollars. Identify the formula to compute the margin of safety in dollars. Margin of safety in dollars The margin of safety in dollars is Choose from any list or enter any number in the input fields and then continue to the next question. SW MacBook Air 11 000 F10 DO F7 Read the requirements. The margin of safety in dollars is Requirement 3. Use the coffee shop's operating leverage factor (using the August 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. Identify the formula to compute the operating leverage factor. Operating leverage factor (Round your answer to two decimal places.) Westlake Coffee's operating leverage factor is If Westlake Coffee can increase sales revenue by 16%, keeping the sales mix the same, operating income will be Prepare a summary contribution margin income statement to prove your answer above. (For amounts with a $0 balance, make sure to enter "o" in the appropriate input field.) Westlake Coffee Effect on Operating Income of 16% Increase in Sales Volume Current level Percent increase Dollar increase Choose from any list or enter any number in the input fields and then continue to the next question. 409 MacBook Air The contribution margin income statement of Westlake Coffee for August follows: Click the icon to view the contribution margin income statement.) Westlake 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. (Round your answer to two decimal places.) Westlake Coffee's operating leverage factor is If Westlake Coffee can increase sales revenue by 16%, keeping the sales mix the same, operating income will be Prepare a summary contribution margin income statement to prove your answer above. (For amounts with a $0 balance, make sure to enter "O" in the appropriate input field.) Westlake Coffee Effect on Operating Income of 16% Increase in Sales Volume Current level Percent increase Dollar increase Sales revenue 16% Less: Variable expenses 16% Contribution margin Change in fixed expenses Operating income before sales increase Operating income after sales increase Choose from any list or enter any number in the input fields and then continue to the next question. MacBook Air i Data Table A 1 Westlake Coffee 2 Contribution Margin Income Statement Month Ended August 31 4 Sales revenue $ 70,000 5 Less variable expenses: 6 Cost of goods sold $ 25,000 7 Marketing expense 7,000 ad General and administrative expense 3,000 35,000 9 Contribution margin $ 35,000 10 Less fixed expenses. Marketing expense $ 12,750 General and administrative expense 2,250 15,000 $ 20,000 13 Operating income Print Done MacBook Air