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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,
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: Fixed expenses are $2,970 per month. Required: 1. Assuming the sales mix above, do the following: a. Prepare a contribution format income statement showing both dollars and percentage columns for each product and for the company as a whole. (Round percentage answers to 2 decimal places.) b. Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of sales. (Do not round your intermediate calculations. Round percentage answer to 2 decimal places.) c. Compute the break-even point in units for the company as a whole and the margin of safety in both units (pairs of gloves) and percentage of sales. (Round percentage answer to 2 decimal places.) d. Compute how many pairs of gloves must be sold overall if the company wants to make an after-tax target profit of $18,900 and the tax rate is 30%. Assume that the sales mix remains the same as shown above
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