Island Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Hawaiian Fantasy $ 20 Selling price per unit Variable expense per unit Number of units sold annually Tahitian Joy $ 110 $ 33 6,000 22,000 Fixed expenses total $664.000 per year. Required: 1. 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. 2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 per unit. If the company can sell 22,000 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 Complete this question by entering your answers in the tabs below. Reg 14 Reg 1B Req 2A Req 28 Total Assuming the sales mix given above, do the following: Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. Island Novelties, Inc. Contribution Income Statement Hawaiian Fantasy Tahitian Joy Amount Amount Amount % Sales s 300,000 100 $ 500,000 100% 3 800.000 100% Variable expenses 180,000 60% 100,000 20 % 280.000 35 % Contribution margin S 120,000 40 % $ 400,000 30 % 520.000 65 "% Fixed expenses 475,000 Net operating Income S 45,000 Rall Reg 1B > Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Assuming the sales mix given above, do the following: Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. (Do not round your intermediate calculations. Round your "Margin of safety percentage" final answer to 1 decimal place (1.60.1234 should be entered as 12.3). Round your other final answers to the nearest whole dollar.) Break-even point in dollar sales Margin of safety in dollars Margin of safety percentage % Complete this question by entering your answers in the tabs below. Reg LA Reg 1B Reg 2A Reg 28 The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 per unit. If the company car Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format income statement that includes Samoan Delight. Assi other two products does not change. (Round your "Percentage answers to 1 decimal place (le 0.1234 should be entered as 12.3).) Island Novelties, Inc. Contribution Income Statement Hawaiian Fantasy Tahitian Joy Samoan Delight Amount Amount % Amount % % % % % $ 0.0 % S ol 0.0 % S 0.0 % Total Amount % % % 00% 0 O 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req ZA Req 2B The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24 per unit. If the company can sell 22,000 units of Samoan Delight without incurring any additional fixed expenses: 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. (Do not round your intermediate calculations. Round your "Margin of safety percentage" final answer to 1 decimal place (ie 0.1234 should be entered as 12.3). Round your other final answers to the nearest whole dollar.) Show less Break-even point in dollar sales Margin of safety in dollars Margin of safety percentago %
