The contribution margin income statement of Krazy Cream Donuts for August 2018 follows: H (Click the icon to view the contribution margin income statement) Krazy Cream 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 e dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the cequirements 50,400 2.80 18,000 Determine Krazy Cream's monthly breakeven point in dozens of plain donuts and custard-filed donuts. The breakeven point is 15,000 dozen plain donuts and 3,000 dozen custard-filed 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. (Enter a "0" for any zero balances.) Krazy Cream Donuts Contribution Margin Income Statement Plain Filled Total Net Sales Revenue 60,000 $ 24,000 S 84,000 O Data Table Variable Costs 24.000 9,600 33.600 Contribution Margin 36,000 $ 14.400 50,400 Krazy Cream Donuts Fixed Costs 50,400 Contribution Margin Income Statement Operating Income Month Ended August 31, 2018 Requirement 3. Compute Krazy Cream's margin of safety in dollars for August 2018. (The contribution margin income statement provided should be used Net Sales Revenue $ 127,000 Variable Costs: Expected sales in dollars Breakeven sales in dollars Margin of safety in dollrs Cost of Goods Sold 32,400 127,000 84,000 43,000 Selling Costs 17,400 Requirement 4. Compute the degree of operating leverage for Krazy Cream Donuts. Estimate the new operating income if total sales increase by 40%. (R al answer to the nearest dollar. Assume the sales mix remains unchanged.) 1,000 50,800 Administrative Costs Begin by computing the degree of operating leverage for Krazy Cream Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX) Contribution Margin 76,200 Contribution margin Operating income Degree of operating leverago Fixed Costs: 76,200 25,800 2.9535 Selling Costs 37,800 Estimate the new operating income iHf total sales increase by 40%. (Round interim calculations to four decimal places and your final answer to the nearest Administrative Costs 12,600 50,400 25,800 The estimated operating income will be Operating Income

The contribution margin income statement of Krazy Cream Donuts for August 2018 follows: H (Click the icon to view the contribution margin income statement) Krazy Cream 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 e dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen. Read the cequirements 50,400 2.80 18,000 Determine Krazy Cream's monthly breakeven point in dozens of plain donuts and custard-filed donuts. The breakeven point is 15,000 dozen plain donuts and 3,000 dozen custard-filed 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. (Enter a "0" for any zero balances.) Krazy Cream Donuts Contribution Margin Income Statement Plain Filled Total Net Sales Revenue 60,000 $ 24,000 S 84,000 O Data Table Variable Costs 24.000 9,600 33.600 Contribution Margin 36,000 $ 14.400 50,400 Krazy Cream Donuts Fixed Costs 50,400 Contribution Margin Income Statement Operating Income Month Ended August 31, 2018 Requirement 3. Compute Krazy Cream's margin of safety in dollars for August 2018. (The contribution margin income statement provided should be used Net Sales Revenue $ 127,000 Variable Costs: Expected sales in dollars Breakeven sales in dollars Margin of safety in dollrs Cost of Goods Sold 32,400 127,000 84,000 43,000 Selling Costs 17,400 Requirement 4. Compute the degree of operating leverage for Krazy Cream Donuts. Estimate the new operating income if total sales increase by 40%. (R al answer to the nearest dollar. Assume the sales mix remains unchanged.) 1,000 50,800 Administrative Costs Begin by computing the degree of operating leverage for Krazy Cream Donuts. (Round the degree of operating leverage to four decimal places, X.XXXX) Contribution Margin 76,200 Contribution margin Operating income Degree of operating leverago Fixed Costs: 76,200 25,800 2.9535 Selling Costs 37,800 Estimate the new operating income iHf total sales increase by 40%. (Round interim calculations to four decimal places and your final answer to the nearest Administrative Costs 12,600 50,400 25,800 The estimated operating income will be Operating Income

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...

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