Question
Hello, I cannot seem to find the same question I posted earlier to edit so here it goes again! Carbex, Inc., produces cutlery sets out
Hello, I cannot seem to find the same question I posted earlier to edit so here it goes again!
Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a standard cutlery set and a deluxe set and sells them to retail department stores throughout the country. The standard set sells for $68, and the deluxe set sells for $83.
The variable expenses associated with each set are given below.
Standard Deluxe
Production costs $ 19.00 $ 34.00
Sales commissions (19% of sales price) $ 12.92 $ 15.77
The companys fixed expenses each month are:
Advertising $ 109,000
Depreciation $ 22,900
Administrative $ 65,000
Salespersons are paid on a commission basis to encourage them to be aggressive in their sales efforts. 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 monthMayare down substantially from April. Sales, in sets, for the last two months are given below:
Standard Deluxe Total
April 4,400 2,400 6,800
May 1,400 5,400 6,800
Prepare contribution format income statements for April. Round "Total percent a. answers to 1 decimal place i.e.1234 should be entered as 12.3) Carbex, I Contribution Income Statement for April Standard Total Deluxe Amount % Amount % Amount Variable expenses 0% 0 %$ 0 0 0 0 0.0 % 0.0 % Total variable expenses 0% Fixed expenses: Total fixed expenses 1- Prepare contribution format income statements for May. Round "Total percent b. answers to 1 decimal place (i.e .1234 should be entered as 12.3) Carbex, Contribution Income Statement for May Standard Deluxe Total Amount % Amount % Amount % Variable expenses: 0% 0%$ 0.0 % 0.0 % Total variable expenses 0% 0 %$ Fixed expenses Total fixed expenses 0 3- Compute the break-even point in dollar sales for April. (Round intermediate a. percentage calculations to 1 decimal place.)Step by Step Solution
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