Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

The contribution margin income statement of Trepani Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Trepani sells five

image text in transcribed

The contribution margin income statement of Trepani Donuts for August 2018 follows: (Click the icon to view the contribution margin income statement.) Trepani 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 2.80 2.40 4.20 - Variable cost per unit Contribution margin per unit X Sales mix in units Contribution margin Weighted average contribution margin per unit $ 12.00 $ 4.20 $ 16.20 $ 2.70 Requirement 2. Determine Trepani'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 productstotal dozens of donuts to be sold. (Complete all answer boxes. Enter a "O" for any zero balances. Enter currency amounts to the nearest cent. Abbreviation used: Weighted-avg, CM = weighted average contribution margin.) Weighted-avg. CM Required sales in ( Fixed costs + Target profit ) per unit units ($ 48,600 + $ 0 / $ 2.70 = 18,000 0 Data Table Determine Trepani's monthly breakeven point in dozens of plain donuts and custard-filled donuts The breakeven dozen plain dozen custard-filled Trepani Donuts point is 15,000 donuts and 3,000 donuts. Contribution Margin Income Statement Month Ended August 31, 2018 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 Net Sales Revenue $126,000 Trepani Donuts Variable Costs: Contribution Margin Income Statement Cost of Goods Plain Filled Total Sold $ 32,400 Net Sales Selling Costs 17,500 Revenue $ 60,000 $ 21,000 $ 81,000 Administrative 24,000 8,400 Variable Costs 32,400 Costs 500 50,400 Contribution Contribution Margin 75,600 Margin $ 36,000 $ 12,600 48,600 Fixed Costs: Selling Costs 48,600 Fixed Costs 36,450 Administrative Operating 12,150 48,600 Income Operating Income $ 27,000 Requirement 3. Compute Trepani's margin of safety in dollars for August 2018. (The contribution margin income statement provided should be used to determine any expected results. Expected sales in Breakeven sales in Margin of safety in Done dollars - dollars = dollars $ 126,000 - $ 81,000 = $ 45,000 Requirement 4. Compute the degree of operating leverage for Trepani Donuts. Estimate the new operating income if total sales increase by 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.) Begin by computing the degree of operating leverage for Trepani Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX.) Degree of operating leverage Costs Print on

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Advanced Accounting

Authors: Debra C. Jeter, Paul Chaney

2nd Edition

0471218529, 978-0471218524

More Books

Students explore these related Accounting questions

Question

What is the effect of word war second?

Answered: 3 weeks ago