Question
Problem 4-25 Sales Mix; Multi-Product Break-Even Analysis; Target Profit; Margin of Safety [LO6, LO7, L09] Warm Hands, a small company based in Prince Edward
Problem 4-25 Sales Mix; Multi-Product Break-Even Analysis; Target Profit; Margin of Safety [LO6, LO7, L09] Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners- Warm and Cozy. Current revenue, cost, and unit sales data for the two products appear below. Selling price per pair Variable expenses per pair Number of pairs sold monthly Fixed expenses are $3,240 per month. Required: Karm $ 5.00 Cozy $7.50 $3.75 2,700 units 900 units $ 1.25 1. Assuming the sales mix above, do the following: a. Prepare a contribution format income statement showing both dollars and percentage columns for each product and for the company as a whole. (Round percentage answers to 2 decimal places.) WARM HANDS Contribution Income Statement Warm Sales Variable expenses Contribution margin Fixed expenses Operating income Cozy % % $ 2,700 100.00 $ 900 100.00 $3,600 Total % 100.00 $ 2,700 100.00 $ 900 100.00 3,600 100.00 $ 3,600 < Prev 2 of 3 Next > MacBook Air
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