The contribution margin income statement of Krazy Kustard Donuts for August 2016

Sales Revenue: $125,000

Variable Costs: COGS: $32,100, Selling Costs: $17,100, Administrative Costs: $800

Contribution Margin: $75,000

Fixed Costs: Selling Costs: $32,400, Administrative Costs: $10,800

Operating Income: $31,800

Krazy Kustard sells 4 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.

1)Calculate the Weighted-Average Contribution margin.

2) Determine Krazy Kustard's monthly breakeven point in dozens of plain donuts and custard filled donuts. Prove your answer in preparing a summary contribution margin income statement at the breakeven level of sales. Show only 2 catagories of costs: Variable and fixed.

3)Compute Krazy Kustard's margin of safety in Dollars.

4)Compute the degree of operating leverage for Krazy Kustard Donuts. Estimate the new operating income if total sales increase by 40%. (Round the degree of operating leverage to 4 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 40% increase in total sales. (The sales mix remains unchanged)