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Question Content Area Multiple-Product Break-even, Break-Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set
Question Content Area Multiple-Product Break-even, Break-Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 13,500 +DVDs and 4,500 equipment sets. Information on the two products is as follows: | DVDs Equipment Sets Price $8 $25 Variable cost per unit 4 15 0 Total fixed cost is $99,900. Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $16 and a variable cost per unit of $9. Total fixed cost must be increased by $33,300 (making total fixed cost $133,200). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same. 51142 2. Compute the break-even quantity of each product. 3a. Prepare an income statement for Cherry Blossom Products for the coming year. Sales Cherry Blossom Products Inc. Income Statement For the Coming Year Total variable cost Contribution margin Total fixed cost Operating income
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