Sweet Pea Donuts Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue $ 126,000 Variable Costs: Cost of Goods Sold $ 32,500 Selling Costs 17,400 Administrative Costs 500 50,400 Contribution Margin 75,600 Fixed Costs: Selling Costs 32,400 Administrative Costs 10,800 43,200 32,400 Operating Income $ Sweet Pea sells four dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the requirements The contribution margin income statement of Sweet Pea Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Requirement 1. Calculate the weighted average contribution margin. (Round all currency amounts to the nearest cent.) Plain Filled Total Sales price per unit Variable cost per unit Contribution margin per unit Sales mix in units Contribution margin Weighted average contribution margin per unit We'll begin with the breakeven point. Start by selecting the formula and entering the amounts to compute the breakeven point in units for the "package" of productstotal dozens of donuts to be sold. amounts to the nearest cent. Abbreviation used: Weighted-avg. CM = weighted average contribution margin.) Fixed costs Target profit )/ Weighted-avg. CM per unit = Required sales in units ( 0)/ Determine Sweet Pea's monthly breakeven point in dozens of plain donuts and custard-filled donuts. The breakeven point is dozen plain donuts and dozen custard-filled donuts Determine Sweet Pea's monthly breakeven point in dozens of plain donuts and custard-filled donuts. The breakeven point is dozen plain donuts and dozen custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Sweet Pea Donuts Contribution Margin Income Statement Plain Filled Total Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income Douromont 2 Compute Swot Don's marain ofenfotu in dollare for Auquet 2019 The contribution margin Requirement 3. Compute Sweet Peas margin of safety in dollars for August 2018. (The contribution margin income statement provided should be used Expected sales in dollars Breakeven sales in dollars = Margin of safety in dollars Requirement 4. Compute the degree of operating leverage for Sweet Pea Donuts. Estimate the new operating income if total sales increase by 30%. (F remains unchanged.) Begin by computing the degree of operating leverage for Sweet Pea Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX.) Contribution margin 1 Operating income Degree of operating leverage Estimate the new operating income if total sales increase by 30%. (Round interim calculations to four decimal places and your final answer to the neare The estimated operating income will be $ Requirement 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 30% increase in total sales. Sweet Pea Donuts Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income
