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Required Information [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products In separate factories and markets them through different channels. They have no shared costs. This year, the company sold 54,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 885,680 531, 360 354,240 210, 240 $ 144, eee Mementos $ 885,600 177, 120 788,480 564, 480 $ 144, eee Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) Answer is complete and correct. PRODUCT CARVINGS Contribution Margin Ratio Denominator: 1 Sales Contribution margin ratio s 885,600 40.00% Numerator: Contribution margin s 354,240 Break-Even Point in Dollars Numerator: Total fixed costs 210,240 Denominator: Contribution margin ratio 40.00% Break-even point in dollars 525,600 S PRODUCT MEMENTOS Sales Contribution Margin Ratio Contribution margin S 708,480 Break-Even Point in Dollars Contribution margin ratio 80.00% s 885,600 Total fixed costs Contribution margin ratio 80.00% Break-even point in dollars 705,600 $ 564,480 $ Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products In separate factories and markets them through different channels. They have no shared costs. This year, the company sold 54,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 885,600 531, 360 354,240 210, 240 $ 144,90 Mementos $ 885,680 177, 120 788,480 564, 480 $ 144,00 2. Assume that the company expects sales of each product to decline to 37,000 units next year with no change in unit selling price. Prepare a contribution margin Income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units $ Per unit Total $ Per unit Total Total 0 $ Oo 0 0 Contribution margin Oo Income (loss) $ 0 s $ Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products In separate factories and markets them through different channels. They have no shared costs. This year, the company sold 54,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 885,680 531, 360 354,240 210, 240 $ 144,800 Mementos $ 885,600 177,120 708,480 564, 480 $ 144, eee 3. Assume that the company expects sales of each product to increase to 68,000 units next year with no change in unit selling price. Prepare a contribution margin Income statement for the next year (as shown above with columns for each of the two products). (Round "per unlt" answers to 2 decimal places.) HENNA COMPANY Contribution Margin Income Statement Carvings Units $ Per unit Total s 0 Mementos Total $ Per unit Total $ 0 $ 0 0 0 0 Contribution margin 0 Income (loss) 69 0 $ 0 s 0
