Island Novelties, Inc., of Palau makes two products$-$Hawailan Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit, and annual sales volume are as follows:

$\backslash$table$[[,\backslash$table$[[$Hawaiian$],[$Fantasy$]],$Tahitian Joy$],[$Selling price per unit,$$,30,$$$,125],[$Variable expense per unit,$$,21,$$$,25],[$Number of units sold annually,,,,$5,600]]$

Fixed expenses total $$565,500$ per year.

Required:

Assuming the sales mix given above, do the following:

a$.$ Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole.

b$.$ Compute the company's break$-$even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage.

The company has developed a new product called Samoan Delight that sells for $$50$ each and that has variable expenses of $$35$ per unit. If the company can sell $20,000$ units of Samoan Delight without incurring any additional fixed expenses:

a$.$ Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change.

b$.$ Compute the company's revised break$-$even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage.