B. The Yucki Candy Co. makes and sells boxes of chocolate candy. Yucki has fixed expenses...

B.

The Yucki Candy Co. makes and sells boxes of chocolate candy. Yucki has fixed expenses of $195,000 each month plus variable expenses of $6.00 per box of candy. Yucki sells each box of candy for $10.00.

• Compute the contribution margin of each box of candy.

• Compute the number of boxes of candy that Yucki must sell each month to break even. Round up to the nearest whole box.

• Compute the contribution margin ratio for a box of candy

.

• Compute the dollar amount of monthly sales Yucki needs to earn $2500,000 in profit. (Round the contribution margin ratio to four decimal places. Round sales up to the nearest dollar.)

• Prepare Yucki’s contribution margin income statement for June for sales of 275,000 boxes of candy.

• What is the degree of leverage for June sales of 275,000 boxes of candy? (Carry answer out to four decimal places.)

• What is June’s margin of safety (in dollars and cents)?

• By what percentage will operating income change if June’s sales volume is 25% higher? (Round to two decimal places.)

• Prove your answer by comparing the difference in operating income after the change with the operating income before the change.

Expert Solution

ekkarill92 answered 2 years ago

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