Coffee sells three small coffees for every large coffee. A small coffee sells for $2.00 , with a variable expense of $1.00. A large coffee sells for $4.00, with a variable expense of $2.00.

Data table Cosmic Coffee Contribution Margin Income Statement Month Ended December 31 Sales revenue $ 108,000 Less variable expenses: $ 34,000 Cost of goods sold Marketing expense 16,000 4,000 General and administrative expense 54,000 $ 54,000 Contribution margin Less fixed expenses: Marketing expense General and administrative expense $ 24,000 6,000 30,000 $ 24,000 Operating income Print Done Requirements Requirements 1. Determine the coffee shop'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 level of sales. Show only two categories of expenses: variable and fixed. 2. Compute the coffee shop's margin of safety in dollars. 3. Use the coffee shop's operating leverage factor (using the December contribution margin income statement) to determine its new operating income if sales volume increases 14%. Prove your results using the contribution margin income statement format. Assume that sales mix remains unchanged