The contribution margin income statement of

Cosmic

Donuts for

August

2016

?follows:

Cosmic

sells

three

dozen plain donuts for every dozen? custard-filled donuts. A dozen plain donuts sells for

$ 4.00,

with total variable cost of

$ 1.80

per dozen.

A dozen? custard-filled donuts sells for

$ 8.00

with total variable cost of

$ 3.60

per dozen.

Read the requirements:

.

Requirement 1. Calculate the? weighted-average contribution margin.? (Round all currency amounts to the nearest? cent.)

Plain

Filled

Total

-

x

Contribution margin

Weighted-average contribution margin per unit

Cosmic Donuts
Contribution Margin Income Statement
Month Ended August 31, 2016
Sales Revenue			$126,000
Variable Costs:
	Cost of Goods Sold	$32,400
	Selling Costs	17,300
	Administrative Costs	7,000	56,700
Contribution Margin			69,300
Fixed Costs:
	Selling Costs	24,750
	Administrative Costs	8,250	33,000
Operating Income			$36,300

	Calculate the? weighted-average contribution margin.
2.	Determine CosmicCosmic?'s monthly breakeven point in dozens of plain donuts and? custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of? costs: variable and fixed.
3.	Compute CosmicCosmic?'s margin of safety in dollars for AugustAugust 20162016.
4.	Compute the degree of operating leverage for CosmicCosmic Donuts. Estimate the new operating income if total sales increase by 10 %10%. ?(Round the degree of operating leverage to four decimal places and the final answer to the nearest dollar. Assume the sales mix remains? unchanged.)
5.	Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 10 %10% increase in total sales.? (The sales mix remains? unchanged.)