18-4A (Algo) 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 separate factories and markets them through different channels. They have no shared costs. This year, the company sold 47,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 813,100 487,860 325,240 194,240 Mementos $ 813,100 81,310 731,790 600,790 $ 131,000 $ 131,000 Problem 18-4A (Algo) Part 1 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) PRODUCT CARVINGS Contribution Margin Ratio Numerator: Break-Even Point in Dollars Numerator: 1 Denominator: Denominator: PRODUCT MEMENTOS Contribution Margin Ratio Contribution margin ratio 0 Break-even point in dollars 0 = Contribution margin ratio Break-Even Point in Dollars 1 = Break-even point in dollars 2. Assume that the company expects sales of each product to decline to 30,000 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). (Round "per unit" answers to 2 decimal places.) Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total $ 0 $ 0 0 0 0 0 0 $ 0 3. Assume that the company expects sales of each product to increase to 61,000 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). (Round "per unit" answers to 2 decimal places.) Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total $ 0 $ 0 $ 0 0 0 0 0 $ 0 $ 0 $ 0