MhEdu SP’19 ACC Contribution Margin Income Statement All I need is question #2 answered. It is to compute the difference in total revenue, total variable c
MhEdu SP’19 ACC Contribution Margin Income Statement All I need is question #2 answered. It is to compute the difference in total revenue, total variable costs, total contribution margin, total fixed costs, and total operating income before and after the promotion. For the following categories: Sales Revenue, Variable Costs, Contribution Margin, Fixed Costs, and Net Operating Income. I have all the information filled out in the in contribution margin income statements above, I just need the difference in the categories calculated. Assignments: SP19: INTRO TO X
Chapter 5 Homework
Х
6 Google Calendar – Week of Feb x
+ Spring Dues 2019 – Google She X
Studypool – Homework Help & X
+
f) ►
c
© ezto.mheducation.com/hm.tpx
80%
…
III
Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $1.00 for the reusable cup and would receive a 20% discount each time they return with
the cup to buy a cup of coffee.
Each week Starcups serves 43,000 customers who purchase an average of 3.00 cups of coffee per week (129,000 cups total). Starcups’s contribution margin income statement for a typical week is shown below:
Sales Revenue
Variable Cost
Contribution Margin
Fixed Costs
Units
129,000
129,000
129,000
Per Unit
$ 4.60
1.80
$ 2.80
Total
$593,400
232,200
$361,200
103,000
$258,200
Net Operating Income
Assume the new cup promotion is expected to impact sales volume, revenue, fixed, and variable costs as follows:
• Starcups estimates that 30% of its current customers (12,900) will participate in the promotion. The remainder of its existing customer base (30,100) will continue to buy an average of 3.00 cups of coffee per week.
• Starcups expected to attract 5,300 new customers to participate in the promotion.
• Customers who participate in the promotion will pay an additional $1.00 for the reusable cup. They will then receive a 20% discount on repeat visits when they bring back their reusable cup.
• The additional variable cost of purchasing the reusable cup is $1.80. The variable cost savings of the paper cup is $.20.
• Starcups expects that customers who participate in the reusable cup promotion will visit an average of 4 times per week, including the first purchase of the reusable cup.
• Starcups will spend a total of $13,000 per week advertising the reusable cup promotion.
Required:
1. Prepare a contribution margin income statement to predict how the reusable cup promotion will impact weekly net operating income.
Units
Per Unit
Total
Customers who do not participate:
Sales Revenue
90,300
$
4.60
$
Variable Costs
90,300
1.80
$
GG
415,380
162,540
252,840
Contribution Margin
90,300
2.80
$
First purchase for customers to buy the reusable cup:
Sales Revenue
18,200
Variable Costs
18,200
$
5.60
$
| |
$
3.40
$
101,920
61,880
40,040
Contribution Margin
18,200
$
2.20
$
$
3.68
$
Repeat visits for customers who buy the reusable cup:
Sales Revenue
54,600
Variable Costs
54,600
Contribution Margin
54,600
$
1.60
$
200,928
87,360
113,568
$
2.08
$
Assignments: SP19: INTRO TO X
Chapter 5 Homework
Х
6 Google Calendar – Week of Feb x
t Spring Dues 2019 – Google She X
Studypool – – Homework Help & X
+
e
ezto.mheducation.com/hm.tpx
80%
…
0 =
Lonnipulon varyin
YU, JUU
2.OU
202,040
$
5.60
$
First purchase for customers to buy the reusable cup:
Sales Revenue
18,200
Variable Costs
18,200
Contribution Margin
18,200
$
3.40
$
101,920
61,880
40,040
$
2.20
$
$
3.68
$
Repeat visits for customers who buy the reusable cup:
Sales Revenue
54,600
Variable Costs
54,600
Contribution Margin
54,600
$
1.60
$
200,928
87,360
113,568
$
2.08
$
2. Compute the difference in total revenue, total variable costs, total contribution margin, total fixed costs, and total operating income before and after the promotion.
Difference
Sales Revenue
Variable Costs
Contribution Margin
Fixed Costs
Net Operating Income
3. How will this sustainability initiative impact the company’s triple bottom line?
O Positive impact
O Negative impact
Hints
eBook & Resources
Hint #1
Check my work
©2019 McGraw-Hill Education. All rights reserved.
Purchase answer to see full
attachment
