question 4

Carbex, Inc. produces Cutlery sets out of high quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $62, and the Deluxe set sells for $77. The variable expenses associated with each set are given below. Variable production costs Sales commissions (168 of sales price) Standard Deluxe $16.00 $31.00 $ 9.92 $12.32 The company's fed expenses each month are: Advertising $106,000 Depreciation $ 22,000 Administrative $ 63,500 Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steady over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April. Sales, in sets, for the last two months are given below. Standard Deluxe Total 4.100 2.100 6.200 1.100 5.100 6,200 May Required: 1. Prepare contribution format income statements for April b. Prepare contribution format income statements for May 3-a. Compute the break-even point in dollar sales for April 3-. Would the break even point in May be higher or lower than the break even point in April? Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 3A Req 3B Prepare contribution format income statements for April. (Round your "Percentage answers to 1 decimal place (ie. .1234 should be entered as 12.3).) Carbex, Inc income Statement For April Standard Deluxe Amount Amount Amour 2224 Fixed expen Req 1B Reg 3A Reg 3B Req 1A Prepare contribution format income statements for May. (Round your "Percentage" answers to 1 decimal place (1.e. .1234 should be entered as 12.3).) Carbex, Inc. Income Statement For May Standard Deluxe Total Amount % Amount % Amount. % % Variable expenses: % % % % + Am Standard %? % Total variable expenses Fixed expenses: Total fixed expenses Req 1A Req 1B Req 3A Req 3B Compute the break-even point in dollar sales for April. (Round intermediate percentage calculations to 1 decimal place and final answer to the nearest whole dollar.) Break-even point in dollar sales Req 1A Req 1B Req 3A Req 3B Would the break-even point in May be higher or lower than the break-even point in April? Higher Lower