Dana's Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette Sales price per rosette Total fixed costs per month 24 1.80 4.00 1100.00 Required: 1. Suppose Dana's would like to generate a profit of $940. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 890 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana's degree of operating leverage if it sells 890 rosettes. 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 712 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Reg 4A Req 4B Prepare a new contribution margin income statement to verify change in dana's profit. (Round your answers to nearest whole number.) Contribution Margin Income Statement For 712 Rosettes Contribution Margin

Dana's Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette Sales price per rosette Total fixed costs per month 24 1.80 4.00 1100.00 Required: 1. Suppose Dana's would like to generate a profit of $940. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 890 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana's degree of operating leverage if it sells 890 rosettes. 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 712 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Reg 4A Req 4B Prepare a new contribution margin income statement to verify change in dana's profit. (Round your answers to nearest whole number.) Contribution Margin Income Statement For 712 Rosettes Contribution Margin

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20E

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