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Stam Co. produces and sells two products, BB and TT. It manufactures these products in separate factories and markets them through different channels. They have
Stam Co. produces and sells two products, BB and TT. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Income statements for each product follow. Required page 736 1. Compute the break-even point in dollar sales for each product. 2. Assume that the company expects sales of each product to decline to 33,000 units next year with no change in the unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). 3. Assume that the company expects sales of each product to increase to 64,000 units next year with no change in the unit selling prices. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). Check (2) Income: BB, $58,400;TT,$(98,000) Analysis Component 4. If sales of each product increase to 64,000 units, which product would experience a greater increase in income? Explain
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