Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Island Novelties, Incorporated, of Palau makes two productsHawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are

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

Hawaiian Fantasy Tahitian Joy
Selling price per unit $ 24 $ 100
Variable expense per unit $ 12 $ 30
Number of units sold annually 25,000 6,000

Fixed expenses total $654,000 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 $60 each and that has variable expenses of $39 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 companys revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage.

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

sland Noveltles, Incorporated, of Palau makes two products-Hawallan Fantasy and Tahitlan Joy. Each product's selling price, varlable expense per unit and annual sales volume are as follows: Fixed expenses total $654,000 per year. Required: Assuming the sales mix glven 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 $60 each and that has varlable expenses of $39 ber 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. Complete this question by entering your answers in the tabs below. 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. Complete this question by entering your answers in the tabs below. 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 (i.e 0.1234 should be entered as 12.3 ). Round your other final answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. The company has developed a neiv product called Samoan Delight that sells for $60 each and that has variable expenses of $39 per unit. If the company can sell 20,000 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change. (Round your "Percentage" answers to 1 decimal place (i,e 0.1234 should be entered as 12.3).) Complete this question by entering your answers in the tabs below. The company has developed a new product called Samoan. Delight that sells for $60 each and that has variable expenses of 539 per unit. If the company can sell 20,000 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 (i,e 0.1234 should be entered as 12.3). Round your other final answers to the nearest whole dollar.) sland Noveltles, Incorporated, of Palau makes two products-Hawallan Fantasy and Tahitlan Joy. Each product's selling price, varlable expense per unit and annual sales volume are as follows: Fixed expenses total $654,000 per year. Required: Assuming the sales mix glven 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 $60 each and that has varlable expenses of $39 ber 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. Complete this question by entering your answers in the tabs below. 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. Complete this question by entering your answers in the tabs below. 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 (i.e 0.1234 should be entered as 12.3 ). Round your other final answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. The company has developed a neiv product called Samoan Delight that sells for $60 each and that has variable expenses of $39 per unit. If the company can sell 20,000 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change. (Round your "Percentage" answers to 1 decimal place (i,e 0.1234 should be entered as 12.3).) Complete this question by entering your answers in the tabs below. The company has developed a new product called Samoan. Delight that sells for $60 each and that has variable expenses of 539 per unit. If the company can sell 20,000 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 (i,e 0.1234 should be entered as 12.3). Round your other final answers to the nearest whole dollar.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Anne Britton, Chris Waterston

4th Edition

0273703609, 978-0273703600

More Books

Students also viewed these Accounting questions

Question

Explain the concept of equal employment opportunity.

Answered: 1 week ago

Question

Explain the various job analysis methods.

Answered: 1 week ago

Question

Describe the components of a job description.

Answered: 1 week ago