Melgelen % A194 x V fx FO 1 Problem 3 2 Nellie sells flowers and has the following information related to her business: 4 5 6 Sales price per flower Variable costs per flower Total fixed costs 0,70 0,20 20 000 8 In a normal year, Nellie sells 75,000 flowers. 10 Required: 11 a. Construct Nellies Contribution Format Income Statement. This is the base example. (10 points) 12 b. What is the break-even in flowers? (10 points) 13 If she spend $5,000 to advertise, which would increase her flowers sold by 10%, by what percent would that increase profits? (10 points) 14 d. What is her operating leverage ratio? What do you understand by operating leverage? (10 points) 15 e. What is her margin of safety as a percentage? Is that a good margin of safety? (10 points) 16 . How many flowers would she need to sell to reach a profit of $30,000? (10 points) 17 18 Solve here: 191