Required informationProblem 18-4A (Static) Break-even analysis, different cost structures, and income calculations LO C2, A1,P2[The following information applies to the questions displayed below.]Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separatefactories and markets them through different channels. They have no shared costs. This year, the company sold 50,000units of each product. Income statements for each product follow.SalesVariable costs.Contribution marginFixed costsIncomeProblem 18-4A (Static) Part 3SalesVariable costContribution marginCarvings$ 2,000,0001,600,000400,000125,000$ 275,0003. Assume that the company expects sales of each product to increase to 60,000 units next year with no change in unit selling price.Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products).Fixed costsIncome (loss)UnitsMementos$ 2,000,000250,0001,750,0001,475,000$ 275,000HENNA COMPANYContribution Margin Income StatementCarvings$ Per unit$Total00$ Per unitMementos.$Total00$Total000

Contribution margin income statement is a format of income statement in which variable cost is…

3. Assume that the company expects sales of each product to increase to 60,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products).

3. Assume that the company expects sales of each product to increase to 60,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products).

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3E: Differential analysis for a discontinued product A condensed income statement by product line for...

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