Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The contribution margin income statement of Delectable Donuts for May 2024 follows (Click the icon to view the contribution margin income statement.) Delectable sells

image text in transcribed

The contribution margin income statement of Delectable Donuts for May 2024 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 $8.00, with total variable cost of $3.20 per dozen. Read the requirements 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 S 4.00 $ 8.00 1.60 3.20 Contribution margin per unit Sales mix in units 2.40 5 4.80 12.00 $ 4.80 $ 16.80 Contribution margin 2.80 Weighted-average contribution margin per unit Requirement 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. 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 products-total dozens of donuts to be sold. (Complete all input fields Enter a "0" for any zero balances. Enter currency amounts to the nearest cent. Abbreviation used: Weighted-avg CM = weighted- average contribution margin.) Fixed costs 50,400 Target profit $ Weighted-avg CM per unit 2.80 Required sales in units 18,000 Determine Delectable's monthly breakeven point in dozens of plain donuts and custard-filled donuts. The breakeven point is 15.000 dozen plain donuts and 3.000 dozen 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. (Enter a "0" for any zero balances.) Delectable Donuts Contribution Margin Income Statement Net Sales Revenue Variable Costs S Plain 60,000 $ 24,000 36,000 $ Filled Total 24,000 $ 9,600 84,000 33,600 14,400 Contribution Margin 50,400 50,400 Fixed Costs 0 Operating Income Requirement 3. Compute Delectable's margin of safety in dollars for May 2024. (The contribution margin income statement provided should be used to determine any expected results.) Margin of safety in dollars = Data table Delectable Donuts Contribution Margin Income Statement Month Ended May 31, 2024 Net Sales Revenue $ 125,000 Variable Costs: Cost of Goods Sold $ Selling Costs 32,100 17.400 Administrative Costs 500 50.000 Contribution Margin 75,000 Fixed Costs: Selling Costs 37,800 Administrative Costs 12,600 50,400 $ Operating Income 24,600 - X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Susan V. Crosson, Belverd E. Needles

8th Edition

9780618777174, 618777180, 618777172, 978-0618777181

Students also viewed these Accounting questions