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Sales Mix Break even Analysis Check Island Novelties, Inc., of Palau makes two products Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense

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Check Island Novelties, Inc., of Palau makes two products Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Hawaiian Fantasy 20 14 30,000 Tahitian Joy $ 125 $ 25 5,200 Fixed expenses total $652.400 per year. Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage 2 The company has developed a new product called Samoan Delight that sells for $50 each and that has variable expenses of $40 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change. b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage 9 of 10

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