Student Name: Section Number: ACCOUNT 249 SPRING 2020 Chapter 5: Graded Homework Assignment Giannis Antetokoumpo, opened a frozen greek yogurt shop, "Freakin' Great Yogurt", in downtown Milwaukee to further his brand in the Milwaukee market. Unfortunately, in the first year of operations he has not been able to make a profit. The most recent income statement based on a current volume of 36,000 servings is as follows. 1. Expand Giannis' current contribution margin income statement for the yogurt to include the sales, variable expenses, and contribution margin information on a per-unit and percent of sales basis. Round your per-unit calculations to the nearest penny and percent of sales calculations to the nearest whole percent, as needed. Sales Level in Units: 36,000 Per-Unit Calculation Sales $306,000 Variable Expenses 176,400 Contribution Margin 129,600 Fixed Expenses 145,000 Net Operating Income ($15,400) % of Sales Calculation 2. Using the Contribution Margin information above, calculate the company's break-even point in unit sales and in dollar sales. Round the break-even point in units to the next full unit, as needed. Break-even point in units Break-even point in sales Calculation Answer Page 1 3. If Giannis wanted to earn a target profit of $50,000, what would yogurt sales need to be in units? Round units to the next full unit, as needed. Calculation Answer Target sales in units 4. If Giannis' company reaches the level in # 3 above, what is the company's Margin of Safety in both sales dollars and units. Margin of safety in dollars Margin of safety in units Calculation Answer 5. Go back to the data assumed in # 1. Giannis believes that if he enacts a targeted advertising campaign costing $20,000 and decreases the selling price of his yogurt by $0.25, he can increase volume by 40%. Prepare a revised contribution margin income statement showing the impacts of these changes: Calculation Answer Sales level in units Sales Variable expenses Contribution margin Fixed expenses Net operating income