Richard’s Donuts sells three types of donuts: sugar-glazed, cream-filled and giant-sized. The following table shows the sales price and variable cost for each type. Richard’s incurs $198,720 a year in fixed costs. Assume that the store has a sales mix of three sugar-glazed, two cream-filled, and one giant-sized. Type Sales Price Variable Cost Contribution Margin Sugar-glazed $0.40 $0.24 $0.16 Cream-filled 0.56 0.28 0.28 Giant-sized 0.72 0.32 0.40 What amount of revenue would need to be generated by each type of donut for the company to earn $33,120 in operating income?

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Step1Calculation of combined contribution Particular sugargla... View the full answer