oglejack9549 oglejack9549

06-06-2023
Business

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Vast Spirit imprints calendars with college names. The celepany has fixed expenses of $1,045,000 each month plus variable expenses of $3.90 per carton of calendars. Of the variable expense, 66% is Cost of Goods Sold, while the remaining 34% relates to variable operating expenses. Vast Spirit sells each carton of calendars for $11.50. Required: a. Use the income statement equation approach to compute the number of cartons of calendars that Vast Spirit must sell each month to break even. (5 MARKS) b. Use the contribution margin ratio shortcut formula to compute the dollar amount of monthly sales Vast Spirit needs in order to earn $275,000 in operating income (round the contribution margin ratio to two decimal places). (5 MARKS) c. Prepare Vast Spirit's contribution margin income statement for June for sales of 460,000 cartons of calendars. (5 MARKS) d. Based on the solutions (c) compute June's margin of safety (in dollars) (5 MARKS)

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