Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The contribution margin income statement of Sweet Pea Donuts for August 2024 follows: E: (Click the icon to view the contribution margin income statement.) Sweet
The contribution margin income statement of Sweet Pea Donuts for August 2024 follows: E: (Click the icon to view the contribution margin income statement.) Sweet Pea sells four 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 $2.80 per dozen. Read the requirements. Data Table Requirement 1. Calculate the weighted average contribution margin. (Round all currency amounts to the nearest cent.) Plain Filled Total Requirements Sales price per unit 4.00 7:00 Sweet Pea Donuts Variable cost per unit 1.60 2.80 Contribution margin per unit 2.40 4.2 Contribution Margin Income Statement Month Ended August 31, 2024 Net Sales Revenue $ 127,000 Sales mix in units Contribution margin Variable Costs: Cost of Goods Sold 32,100 Weighted average contribution margin per unit 1. Calculate the weighted average contribution margin. 2. Determine Sweet Pea'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 Sweet Pea's margin of safety in dollars for August 2024. 4. Compute the degree of operating leverage for Sweet Pea Donuts. Estimate the new operating income if total sales increase by 30%. (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 30% increase in total sales. (The sales mix remains unchanged.) Selling Costs 17,200 1,500 Administrative Costs 50,800 Contribution Margin 76,200 Fixed Costs: Selling Costs 31,050 10,350 Administrative Costs 41,400 Print Done $ 34,800 Operating Income Choose from any list or enter any number in the innut fields and then click Check
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started