excel week 5

5-2

	The contribution margin income statement of Cosmic Donuts for March 2012 follows:
	Cosmic sells 2 dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts
	sells for $6, with a variable cost of $2. A Dozen custard-filled donuts sells for $8, with a variable
	cost of $5.50 per dozen.
	Requirements
	1.	Determine Cosmic'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.
	2.	Compute Cosmic's margin of safety in dollars for March 2012.
	3.	If Cosmic can increase monthly sales volume by 10%, what will operating income be?
		The sales mix remains unchanged.
	Requirement 1
					Plain/doz.	Filled/doz.
		Breakeven point
		Prepare a summary contribution margin income statement to prove your answer above.
					Plain/doz	Filled/doz	Total
		Sales revenue			$ - 0	$ - 0	$ - 0
		Variable costs			- 0	- 0	- 0
		Contribution margin					- 0
		Fixed costs
		Operating income					$ - 0
	Requirement 2
		The margin of safety in dollars is
	Requirement 3
		If Cosmic Donuts can increase sales revenue by 10%, keeping the sales mix the same,
		operating income will be

Solution Sept 26, 2008

Course# Student ID

Print Your Work