Spirit Rock Calendars imprints calendars with college names. The company has fixed expenses of $$1,125,000$ each month plus variable expenses of $$4\mathrm{.}50$ per carton of calendars. Of the variable expense, $70\%$

is cost of goods sold, while the remaining $30\%$ relates to variable operating expenses. The company sells each carton of calendars for $$19\mathrm{.}50.$

Read the requirements.

Requirement $1.$ Compute the number of cartons of calendars that Spirit Rock Calendars must sell each month to breakeven.

Begin by determining the basic income statement equation.

Requirements

Compute the number of cartons of calendars that Spirit Rock Calendars must

sell each month to break even.

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$).$

Prepare the company's contribution margin income statement for June for sales

of $485,000$ cartons of calendars.

What is June's margin of safety $($in dollars$)?$ What is the operating leverage

factor at this level of sales?

By what percentage will operating income change if July's sales volume is

$16\%$ higher? Prove your answer.