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The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per
The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. An average of 2,100 cups are sold each month. 1) Compute the margin of safety in dollars, percentage and units. the operating leverage. Interpret the result. 2) If we increase 500 units, what is the increase in net operating income? 3) If we increase our sales by $ 2,000 what is the increase in net operating income? 4) If we increase our sales by 10%, what is the increase in net operating income? S= 1.49 V= 0.36 CM/unit= 1.13 Fixed expenses= 1300 CM ratio= 75.83% V. Expense ratio= 24.16%
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