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I need help with 2 and 3. Thank you! Jean Leeman Co. of Texas makes two products. Mini and Giaa. Present revenue, cost, and sales
I need help with 2 and 3. Thank you!
Jean Leeman Co. of Texas makes two products. Mini and Giaa. Present revenue, cost, and sales data on the two products follow: Fixed expenses total $378,000 per year. Required: Assuming the sales mix given above, do the following: Prepare a contribution income statement showing both dollar and percent columns for each product and for the company as a whole. Compute the break-even point in dollars for the company as a whole and the margin of safety in both dollars and percent. The company has just developed a new product. Mega. Assume that the company could sell 36.000 units at $50 each. The variable expenses would be $35 each. The company's fixed expenses would not change. Prepare another contribution income statement, including sales of Mega (sales of the other two products would not change). Carry percentage computations to one decimal place. Compute the company's new break-even point in dollars and the new margin of safety in both dollars and percent. The president of the company examines your figures and says. "There's something strange here. Our fixed costs haven't changed and you show greater total contribution margin if we add the new product. but you also show our break-even point going up. With greater contribution margin, the breakeven point should go down, not up. You've made a mistake somewhere." Explain to the president what has happenedStep by Step Solution
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