land Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense er unit, and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually. Hawaiian Fantasy 20 9 22,000 $ Tahitian Joy $ $ 110 33 6,000 ixed expenses total $664,000 per year. equired: Assuming the sales mix given above, do the following: Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as whole. . Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety ercentage. . The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 er unit. If the company can sell 22,000 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products oes not change. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of afety percentage.
land Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense er unit, and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually. Hawaiian Fantasy 20 9 22,000 $ Tahitian Joy $ $ 110 33 6,000 ixed expenses total $664,000 per year. equired: Assuming the sales mix given above, do the following: Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as whole. . Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety ercentage. . The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 er unit. If the company can sell 22,000 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products oes not change. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of afety percentage.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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