Question

Fast Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,125,000 each month plus variable expenses of $4.50 per carton of calendars. Of the variable​ expense, 69​% is cost of goods​ sold, while the remaining 31​% relates to variable operating expenses. The company sells each carton of calendars for $19.50

1.) The Break Even Sale is ______ Cartoons?

2.) Monthly Sales Needed to Earn $338,000 in Operating Income is ______.

3.) Prepare the Company's Contribution Margin Income Statement for June for Sales of 470,000 Cartoons

Sales Revenue:

Variable Expenses:

Cost of Goods Sold:

Operating Expenses:

Contribution Margin:

Fixed Expenses:

Operating Income:

4.) What is​ June's margin of safety​ (in dollars)? What is the operating leverage factor at this level of​ sales?

5.) By what percentage will operating income change if​ July's sales volume is 14​% higher? Prove your answer. ​(Round the percentage to two decimal​ places.

Answer 1