Henna Co. produces and sells two products, Carvings and Mementos. It manufactures these products in separate...
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Henna Co. 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 50,000 units of each product. Income statements for each product follow. Carvings Mementos Sales Variable costs $2,000,000 $2,000,000 1,600,000 250,000 Contribution margin 400,000 1,750,000 Fixed costs Income 125,000 1,475,000 $ 275,000 $275,000 Required 1. Compute the break-even point in dollar sales for each product. 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). 3. Assume that the company expects sales of each product to increase to 60,000 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). Henna Co. 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 50,000 units of each product. Income statements for each product follow. Carvings Mementos Sales Variable costs $2,000,000 $2,000,000 1,600,000 250,000 Contribution margin 400,000 1,750,000 Fixed costs Income 125,000 1,475,000 $ 275,000 $275,000 Required 1. Compute the break-even point in dollar sales for each product. 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). 3. Assume that the company expects sales of each product to increase to 60,000 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).
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1 Compute the breakeven point in dollar sales for each product Carvings Breakeven Point Fixed Costs ... View the full answer
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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