Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runnersWarm and Cozy. Current revenue, cost, and unit sales data for the two products appear below:

	Warm			Cozy
Selling price per pair	$	5.00		$	7.50
Variable expenses per pair	$	1.25		$	3.75
Number of pairs sold monthly		900	units		300	units

Fixed expenses are $2,970 per month.

2. The company has developed another type of gloves that provide better protection in extreme cold, Toasty, which the company plans to sell for $15.50 per pair. At this price, the company expects to sell 300 pairs per month of the product. The variable expense would be $12.40 per pair. The companys fixed expenses would not change.

a. Prepare another contribution format income statement, including sales of Toasty (sales of the other two products would not change). (Round percentage answers to 2 decimal places.)

b. Compute the companys new break-even point in sales dollars for the company as a whole and the new margin of safety in both dollars and percentage of sales. (Round your break-even sales to the nearest whole dollar amount and percentage answer to 2 decimal places.)

WARM HANDS Contribution Income Statement Warm Cozy Toasty Total % % % % $ 0 0 $ O 0.00 $ 0 0.00 $ 0 0.00 O Break-even sales dollars Margin of safety in dollars Margin of safety in percentage %