The contribution margin income statement of Unique Donuts for August 2024 follows (Click the icon to view the contribution margin income statement.) Data table Unique Donuts Contribution Margin Income Statement Month Ended August 31, 2024 Net Sales Revenue Variable Costs: Cost of Goods Sold Selling Costs Administrative Costs Contribution Margin Fixed Costs Selling Costs Administrative Costs Operating Income $ 32,300 17,200 1,300 42,210 14,070 - $ 127,000 $ 50,800 76,200 56,280 19,920 Requirements Unique sells two dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $3.10, with total variable cost of $1.24 per dozen. A dozen custard-filled donuts sells for $7.20, with total variable cost of $2.88 per dozen. 4 1. Calculate the weighted average contribution margin. 2. Determine Unique'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 Unique's margin of safety in dollars for August 2024. 4. Compute the degree of operating leverage for Unique Donuts. Estimate the new operating income if total sales increase by 40% (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 40% increase in total sales. (The sales mix remains unchanged.) Print - X Done come statement at the donuts to be sold in.)
The contribution margin income statement of Unique Donuts for August 2024 follows (Click the icon to view the contribution margin income statement.) Data table Unique Donuts Contribution Margin Income Statement Month Ended August 31, 2024 Net Sales Revenue Variable Costs: Cost of Goods Sold Selling Costs Administrative Costs Contribution Margin Fixed Costs Selling Costs Administrative Costs Operating Income $ 32,300 17,200 1,300 42,210 14,070 - $ 127,000 $ 50,800 76,200 56,280 19,920 Requirements Unique sells two dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $3.10, with total variable cost of $1.24 per dozen. A dozen custard-filled donuts sells for $7.20, with total variable cost of $2.88 per dozen. 4 1. Calculate the weighted average contribution margin. 2. Determine Unique'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 Unique's margin of safety in dollars for August 2024. 4. Compute the degree of operating leverage for Unique Donuts. Estimate the new operating income if total sales increase by 40% (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 40% increase in total sales. (The sales mix remains unchanged.) Print - X Done come statement at the donuts to be sold in.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The contribution margin income statement of Unique Donuts for August 2024 follows:
(Click the icon to view the contribution margin income statement.)
Data table
Unique Donuts
Contribution Margin Income Statement
Month Ended August 31, 2024
Net Sales Revenue
Variable Costs:
Cost of Goods Sold
Selling Costs
Administrative Costs
Contribution Margin
Fixed Costs:
Selling Costs
Administrative Costs
Operating Income
$
32,300
17,200
1,300
42,210
14,070
$
$
-
127,000
50,800
76,200
56,280
19,920
Requirements
Unique sells two dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts
sells for $3.10, with total variable cost of $1.24 per dozen. A dozen custard-filled donuts sells for
$7.20, with total variable cost of $2.88 per dozen.
d-filled donuts
1. Calculate the weighted-average contribution margin.
2. Determine Unique'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 Unique's margin of safety in dollars for August 2024.
4. Compute the degree of operating leverage for Unique Donuts. Estimate the
new operating income if total sales increase by 40% (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 40% increase in total sales. (The sales mix remains
unchanged.)
4
Print
Done
- X
come statement at the
donuts to be sold.
gin.)
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