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The contribution margin income statement of Delectable Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Delectable sells five
The contribution margin income statement of Delectable Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Delectable sells five dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $7.00, with total variable cost of $2.80 per dozen. Read the requirements Requirement 1. Calculate the weighted average contribution margin. (Round all currency amounts to the nearest cent.) Filled Total Sales price per unit - X $ Plain 4.00 $ 1.60 7.00 Data Table 2.80 - X Requirements Variable cost per unit Contribution margin per unit Sales mix in units 2.40 4.20 5 1 6 $ 4.20 Contribution margin Delectable Donuts Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue $ 126.000 Variable Costs: Weighted average contribution margin per unit $ 32.100 1. Calculate the weighted average contribution margin. 2. Determine Delectable'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 Delectable's margin of safety in dollars for August 2018 4. Compute the degree of operating leverage for Delectable Donuts. Estimate the new operating income if total sales increase by 20% (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 20% increase in total sales. (The sales mix remains unchanged.) 17,500 800 Cost of Goods Sold Selling Costs Administrative Costs Contribution Margin Fixed Costs: Selling Costs 50,400 75,600 36,450 12,150 Administrative Costs 48,600 Print Done $ 27,000 Operating Income Print Done
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