The contribution margin income statement of Delectable Donuts for August 2012 follows:

Delectable sells four dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $5, with total variable cost of $2 per dozen.
Requirements
1. Calculate the weighted-average contribution margin.
2. Determine Delectable€™s monthly breakeven point in dozens of plain donuts and custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of costs: variable and fixed.
3. Compute Delectable€™s margin of safety in dollars for August 2012.
4. If Delectable can increase monthly sales revenue from August€™s level by 20%, what will operating income be? (The sales mix remainsunchanged.)

DELECTABLE DONUTS Contribution Margin Income Statement For the Month of August 2012 $ 150,000 Sales revenue Variable costs: $ 41,000 Cost of goods sold Marketing costs 15,000 General and administrative costs 4,000 60,000 $ 90,000 Contribution margin Fixed costs: Marketing costs 37,800 12,600 General and administrative costs 50,400 Operating income 39,600