Problem 5-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [The...
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Problem 5-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [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 $ 885,600 531,360 354,240 210,240 Mementos $ 885,600 177,120 708,480 564,480 $ 144,000 $ 144,000 Problem 5-4A (Algo) Part 2 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 Total $ Per unit Total $ Per unit Total Sales 37,000 $ 0 $ 0 Variable cost 37,000 0 0 0 Contribution margin 37,000 Fixed costs Income (loss) 0 $ 0 $ 0 $ 0 Problem 5-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2 [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 $ 885,600 531,360 354,240 210,240 Mementos $ 885,600 177,120 708,480 564,480 $ 144,000 $ 144,000 Problem 5-4A (Algo) Part 2 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 Total $ Per unit Total $ Per unit Total Sales 37,000 $ 0 $ 0 Variable cost 37,000 0 0 0 Contribution margin 37,000 Fixed costs Income (loss) 0 $ 0 $ 0 $ 0
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