Island Novelties, Incorporated, 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:

Fixed expenses total $$580,500$ 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 $$40$ each and that has variable expenses of

$$32$ per unit. If the company can sell $11,200$ 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.

Req $1A$

Req $1$B

Req $2$A

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.