The contribution margin income statement of Krazy. Kup Coffee for February follows: Krazy Kup Coffee Contribution Margin Income Statement...

 
 

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The contribution margin income statement of Krazy. Kup Coffee for February follows: Krazy Kup Coffee Contribution Margin Income Statement For the Month Ended February 29 Sales revenue Variable expenses. Cost of goods sold Marketing expense General and administrative expense Contribution margin Fixed expenses. Marketing expense General and administrative expense Operating income $28,000 10,000 3,000 34,650 7,350 $103,000 41,000 62,000 42,000 $20,00 Krazy Kup Coffee sells three small coffees for every large coffee. A small coffee sells for $3.00, with a variable expense of $1.50. A large coffee sells for $5.00, with a variable expense of $2.50. Requirements Use Krazy Kup Coffee's operating leverage factor to determine its new operating income if sales volume increases 15%. Prove your results using the contribution margin income statement format. Assume the sales mix remains unchanged.Krazy Kup Coffee's operating leverage factor is income will be $29300 If Krazy Kup Coffee can increase sales revenue by 15%, keeping the sales mix the same, operating Prepare a summary contribution margin income statement to prove your answer above Krazy Kup Coffee Effect on Operating Income of 15% Increase in Sales Volume Sales revenue Less: Variable expenses Contribution margin Change in fixed expenses Operating income before sales increase Operating income after sales increase Current level Percent increase 15% 15% Dollar increase F

Answer rating: 100% (QA)

Current Levels Sales revenue 103 000 Variable expenses Total 28 000 Cost of goods sold 10 000 Marketing expenses 38 000 Contribution margin 62 000 Fix View the full answer