Reference no: EM131800632

Problem

1. Determine Westlake Coffee's monthly breakeven point in the numbers of small coffees and large coffees. Prove your answer by preparing a summary contribution margin income statement at the breakeven levels of sales. Show only two categories of expenses: variable and fixed

2. Compute margin of safety in dollars

3. Use operating leverage factor to determine its new operating income if sales volume increases 15%

Sales Revenue: $126,000
Variable Cose: $63,000
Contribution Margin : $63,000
Fixed Expenses: $28,000
Operating income: $35,000.