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.