Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next years plans call for a $180 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $154,800, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $144 per 100 yards of XT rope.

3.

Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.

2.

Compute the predicted break-even point in dollar sales for year 2016 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.)

	Contribution margin per unit		Proposed
			$0.00
Contribution Margin Ratio
	Choose Numerator:	/	Choose Denominator:	=	Contribution Margin Ratio
		/		=	Contribution margin ratio
					0
Break-even point in dollar sales with new machine:
	Choose Numerator:	/	Choose Denominator:	=	Break-Even Point in Dollars
		/		=	Break-even point in dollars
					0