MBA 560 Financial and Managerial Accounting Module 8 Problem Test Answers

MBA 560 Financial and Managerial Accounting Module 8 Problem Test Answers

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Saint Leo MBA 560 MBA 560 Module 8 Problem Test Solution

College Team Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of $6.50 per carton of calendars. Of the variable  expense, 75 % is Cost of Goods  Sold, while the remaining 25 % relates to variable operating expenses. The company sells each carton of calendars for $16.50.

Requirements

1.	Compute the number of cartons of calendars that College Team Calendars must sell each month to break even.
2.	Compute the dollar amount of monthly sales College Team Calendars needs in order to earn $308,000 in operating income  (round the contribution margin ratio to two decimal  places).
3.	Prepare the  company's contribution margin income statement for June for sales of 475,000 cartons of calendars.
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 12 % higher? Prove your answer.