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Cost Volu me Prot Analysis Case Study Mrs. Brasslne ACCT 2521 Wake Me Up Coffee Company sells one size cups of plain old black coffee on The street corners of a large metropolitan city. tts contribution margin income statement is as follows for The '1't quarter of 201?: Wake Me Up Coffee Company Contribution Margin Income Statement For the Quarter Ended March 31, 201? Sales Revenue {$2.00 per cu p} $360,000 Less Variable Expenses: Cost of lIGoods Sold $90,000 Marketing Expenses General &Administrative Expenses 11?.000 Contribution Margin $243,000 Less Fixed Expenses: Marketing Expenses $45,000 General &Administrative Expenses m Operating Income $1?5',100 |||ll||| Wake Me Up Coffee Company wants to stay with its cunent supplier of coffee; however, The current supplier is increasing its prices quite substantially by $4.00 per pound of coffee. Each pound of coffee makes 40 cups of coffee. (Hint: You will need to convert price per pou nd of coffee to price per cup-) Due to recent growth, Wake Me Up Coffee Company has decided to hire a new manager that would cost the company $1500 per quarter for the new position's salary. Wake Me Up Coffee Company believes that it can reduce variable marketing expenses by $0.05 per cup by increasing xed marketing expenses by $4,000. 'With this new marketing scheme, The company believes it can generate a 5% increase in sales volume all the while keeping the price of each cup of coffee at $2.00. Wake Me Up Coffee Company wants to put These changes into place by re Third quarter of 201?; however, it needs to answer a few questions internally before it decides to move forward. All scenarios are independent of one anoTher. Please show all calculations for full credit Prepare an analysis for The following in good, readable. easy-tofollouv form: 1. Find The unit contribution margin as well as The contribution margin ratio before The changes are implemented- 2. Find The brea laeven point in cups of coffee {units} and in sales dollars before the changes are implemented. Round re answers up to the next whole number. 3. Find The new unit contribution margin as well as the contribution margin ratio after the changes are implemented- 4. What is the impact on Wake Me Up Coffee Com pa ny's Operating Income based on the above changes? Should The company proceed with all the changes? If yes, why? If no, what changes would you suggest if the company wants to stay with its current coffee supplier? 5. Based on the new cost structure, how many cups of coffee mold Wales Me Up Coffee Company need to sell to maintain a prot of $1?9.100? Round the answer up to the next whole number. 6. Based on the new cost structure, how many cups of coffee mold Wales Me Up Coffee Company need to sell to earn a target prot of $250,000? Round the answer up to the next whole number