Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $70, and the Deluxe set sells for $85. The variable expenses associated with each set are given below. Standard Deluxe Variable production costs $20.00 $35.00 Sales commissions (20% of sales price) $14.00 $17.00 The company's fixed expenses each month are: Advertising $110,000 Depreciation $ 23,200 Administrative $ 65,500 Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have Increased, profits for the current month ---May-are down substantially from April. Sales, in sets, for the last two months are given below: April May Standard Deluxe Total 4,500 2,500 7,000 1,500 5,500 7,000 Required: 1-a. Prepare contribution format income statement for April 1-b. Prepare contribution format income statement for May. 3-a. Compute the break-even point in dollar sales for April. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Reg 3A Reg 38 Prepare contribution format income statement for April (Round your "Percentage answers to 1 decimal place (i...1234 should be entered as 12.3).) Total Carbex, Ine. Income Statement For April Standard Deluxe Amount % Amount % 100.0 % 315.000 212,500 100.0% Amount 34 Sales 100.0% 527500 Variable expenses Production Sales commission 90,000 87,500 42,500 412% 20.0% 177.500 105,500 % 20.0% 63.000 20.0 % % % 153.000 48.6 % 612 283.000 % 130,000 $ 82,500 200 800 > 38.8 % 162.000 + 514 244 500 Total variable expenses Contribution margin Fixed expenses Advertising Depreciation Administrative OOO 110,000 23.200 65,500 Total fixed expenses Net operating income 198,700 $ 45,800 Carbox, Inc. Income Statement For May Standard % Amount Total Deluxe % Amount % Amount S 105.000 100.0 % 100.0 % > o 100.0 % 467,500 572,500 Sales Variable expenses Production Sales commission 30,000 21.000 28.6% 20.0% 192,500 93,500 222,500 114,500 38.9% 20.0% 412% 20.0% % % % % % 51,000 48.6 % 286,000 % 337,000 58.9 % 612 388 $ 54,000 514 % % % 181,500 235,500 Total variable expenses Contribution margin Fixed expenses Advertising Depreciation Administrative OOO 110.000 23,200 65,500 Total fixed expenses Net operating income 198,700 $ 36,800 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 3A Req 3B Compute the break-even point in dollar sales for April. (Round Intermediate percentage calculations to 1 decimal place and final answer to the nearest whole dollar.) Break-even point in dollar sales $ 428,688
