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 55,000 units of each product. Income statements for each product follow. Carvings Mementos Sales Variable costs: Contribution margin Fixed costs Income $ 907,500 $ 907,500 726,000 181,500 36,500 $145,000 90,750 816,750 671,750 $145,000 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. PRODUCT CARVINGS Contribution Margin Ratio Numerator: Break Even Point in Dollars Numerator: Denominator: 1 Denominator: Contribution margin ratio. Break-even point in dollars PRODUCT MEMENTOS Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollars Break-even point in dollars 2. Assume that the company expects sales of each product to decline to 38,000 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. HENNA COMPANY Contribution Margin Income Statement Contribution margin Income (loss) Carvings Mementos Units Total $ Per unit Total $ Per unit Total 3. Assume that the company expects sales of each product to increase to 69,000 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. HENNA COMPANY Contribution Margin Income Statement Carvings Units 5 Per unit Mementos Total Total $ Per unit Total Contribution margin Income (loss)