The

Delightful DonutDelightful Donut

owns and operates six

doughnut outletsdoughnut outlets

in and around

Kansas CityKansas City.

You are given the following corporate budget data for next year:

Revenues	$10,300,000
Fixed costs	$1,300,000
Variable costs	$8,300,000

Variable costs change based on the number of

doughnutsdoughnuts

sold.

Requirement

Compute the budgeted operating income for each of the following deviations from the original budget data.(Consider each case independently.)

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Begin by completing the table for the original information provided, then complete the table for each case, one at a time. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

			Contribution		Budgeted
	Revenues	Variable costs	margin	Fixed costs	operating income
Original

1.

2.

3.

4.

5.

6.

7.

8.

1.	Upper AA 1212% increase in contribution margin, holding revenues constant
2.	Upper AA 1212% decrease in contribution margin, holding revenues constant
3.	A 33% increase in fixed costs
4.	A 33% decrease in fixed costs
5.	Upper AA 77% increase in units sold
6.	Upper AA 77% decrease in units sold
7.	Upper AA 1212% increase in fixed costs and aa 1212% increase in units sold
8.	A 33% increase in fixed costs and a 33% decrease in variable costs
9.	Which of these alternatives yields the highest budgeted operatingincome? Explain why this is the case.