both income statements are posted already

Income Statement - Cover-to-Cover Income Statement - Biblio Files Cover-to-Cover Company Biblio Files Company Contribution Margin Income Statement Contribution Margin Income Statement For the Year Ended December 31, 2047 For the Year Ended December 31, 2017 1 Sales $424,000.00 1 Sales $424,000.00 2 Variable costs: 2 Variable costs: 3 Manufacturing expense $233,200.00 $169,600.00 4 Selling expense 21,200.00 16,960.00 3 Manufacturing expense 4 Selling expense 5 Administrative expense Contribution margin 5 Administrative expense 63,600.00 318,000.00 67,840.00 254.400,00 6 Contribution margin $106,000.00 6 $169,600.00 7 Fixed costs: 7 Fixed costs: 8 Manufacturing expense $5,000.00 $88,000.00 9 Selling expense 4,000.00 8 Manufacturing expense 9 Selling expense 10 Administrative expense 8,000.00 10 Administrative expense 33,400.00 42,400.00 10,000.00 106,000.00 11 Income from operations $63,600.00 11 Income from operations $63,600.00 Sales Mix Shaded cells have feedback. x Target Profit Shaded cells have feedback Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement panels. Note that both companies have the same sales and net income. Answer questions (1)-(3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales. Sales Price per Unit Variable Cost per Unit Type of Bookshelf Basic $5.00 $1.75 1. If Cover-to-Cover Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be? Deluxe 9.00 8.10 $ Points 0/1 Feedback The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called "Combined," the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $346,962. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table. Check My Work Examine the differences between the two companies, including the differences in elements of the target profit formula Type of Bookshelf Percent of Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Basic % $ 2. If Biblio Files Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be? $ Deluxe % Points 0/1 Points 0/6 Feedback Check My Work Examine the differences between the two companies, including the differences in elements of the target profit formula. 3. What would explain the difference between your answers for (1) and (2)? O The answers are not different; each company has the same required sales amount for the coming year to achieve the desired target profit The companies have goals that are not in the relevant range. O Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operations. Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide income from operations