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Team Spirit Calendars impronts calendars with college names. The company has fixed expenses of $1,125,000 each month plus variable expenses of $4.50 per carton of
Team Spirit Calendars impronts calendars with college names. The company has fixed expenses of $1,125,000 each month plus variable expenses of $4.50 per carton of calendars. Of the variable expense, 65% is cost of goods sold, while the remaining 35% relates to variable operating expenses. The company sells each carton of calendars for $19.50.
Requirement 1. Compute the number of cartons of calendars that Team Spirit Calendars must sell each month to breakeven. Begin by determining the basic income statement equation Sales revenue Variable expenses Fixed expenses = Operating income Using the basic income statement equation you determined above solve for the number of cartons to break even The breakeven sales is 75,000 cartons Requirement 2. Compute the dollar amount of monthly sales Team Spirit Calendars needs in order to earn $338,000 in operating income. Begin by determining the formula. Fixed expenses Target operating income )+ Contribution margin ratio = Target sales in dollars (Round the contribution margin ratio to two decimal places.) The monthly sales needed to earn $338,000 in operating income is Step by Step Solution
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