Required information Problem 21-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1,...
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Required information Problem 21-4A (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 48,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 825,600 577,920 247,680 113,680 $ 134,000 Mementos $ 825,600 165,120 660,480 526,480 $ 134,000 Problem 21-4A (Algo) Part 1 Required: 1. Compute the break-even point in dollar sales for each product. Note: Enter CM ratio as percentage rounded to 2 decimal places. Contribution Margin Ratio Numerator: Break-Even Point in Dollars Numerator: Contribution Margin Ratio Break-Even Point in Dollars PRODUCT CARVINGS Denominator: Denominator: PRODUCT MEMENTOS Contribution margin ratio 0 Break-even point in dollars 0 Contribution margin ratio 0 = Break-even point in dollars 0 Problem 21-4A (Algo) Part 2 2. Assume that the company expects sales of each product to decline to 31,000 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). Note: Round "per unit" answers to 2 decimal places. Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units $ Per unit Total $ Per unit Total SA $ 0 $ EA 0 0 $ 0 $ EA 0 $ Total 0 0 0 0 3. Assume that the company expects sales of each product to increase to 62,000 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). Note: Round "per unit" answers to 2 decimal places. Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total 69 $ 0 $ 0 $ 0 0 0 0 0 $ 0 $ 0 $ 0 Required information Problem 21-4A (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 48,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 825,600 577,920 247,680 113,680 $ 134,000 Mementos $ 825,600 165,120 660,480 526,480 $ 134,000 Problem 21-4A (Algo) Part 1 Required: 1. Compute the break-even point in dollar sales for each product. Note: Enter CM ratio as percentage rounded to 2 decimal places. Contribution Margin Ratio Numerator: Break-Even Point in Dollars Numerator: Contribution Margin Ratio Break-Even Point in Dollars PRODUCT CARVINGS Denominator: Denominator: PRODUCT MEMENTOS Contribution margin ratio 0 Break-even point in dollars 0 Contribution margin ratio 0 = Break-even point in dollars 0 Problem 21-4A (Algo) Part 2 2. Assume that the company expects sales of each product to decline to 31,000 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). Note: Round "per unit" answers to 2 decimal places. Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units $ Per unit Total $ Per unit Total SA $ 0 $ EA 0 0 $ 0 $ EA 0 $ Total 0 0 0 0 3. Assume that the company expects sales of each product to increase to 62,000 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). Note: Round "per unit" answers to 2 decimal places. Contribution margin Income (loss) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total 69 $ 0 $ 0 $ 0 0 0 0 0 $ 0 $ 0 $ 0
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