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M7 CONNECT Homework Problems o Saved 2 125 points eBook 0 References Rainbow Paints operates a chain of retail paint stores. Although the paint is sold under the Rainbow label, it is purchased from an independent paint manufacturer. Guy Walker, president of Rainbow Paints, is studying the advisability of opening another store. His estimates of monthly costs for the proposed location are as follows: Fixed costs Occupancy costs $ 3,160 salaries 3,640 other 1,200 variable costs {including cost of paint) $ 6 per gallon Although Rainbow stores sell several different types of paint, monthly sales revenue consistently averages $10 per gallon sold. Required: a. Compute the contribution margin ratio and the break-even point in dollar sales and in gallons sold for the proposed store . Walker thinks that the proposed store will sell between 2,200 and 2,600 gallens of paint per month. Compute the amount of operating income that would be earned per month at each of these sales volumes a. Contribution margin ratio fa. Break-even sales volume in dollars {a. Break-even sales volume In gallons ic Operating Income for 2,200 Gallons c. Operating income for 2,600 Gallons Help Save & Exit Submit