Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners-Warm and Cozy. Current revenue, cost, and unit sales data for the two products appear below Selling price per pair Variable expenses per pair Number of pairs sold sonthly Warn $10.00 $ 2.50 1,800 units Coty $15.00 $ 7.50 600 units Fixed expenses ate 31800 per month Required 1. Assuming the soles 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 * a whicle (Pound percentage answers to 2 decimal places.) WAR HANDS Contribution Income Statement Warm Cory Total 1 0.00 5 0.00 doo 0 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.) Break-even sales dollars Margin of safety in dollars Margin of safety in percentage t. Compute the break even point in units for the company as a whole and the margin of safety in both unto pair of gloves) and percentage of sales (Pound percentage answer to 2 decimal places) Brennis Margin of sein und Man of safety in percentage d. Compute how many polts of gloves must be sold over all if the company wants to make an after-tax target profit of $15.750 and the tox role is 30% Assume that the sales mix remains the same as shown above Sales nuits 2. The company has developed another type of gloves that provide better protection in dreme cold Tossty, which the company plans to sell for $23.00 per pax Al this price, the company expect to tel 600 por per month of the product the worlable expense would be 318 40 per par. The companys fred expenses would not change 2 The company has developed another type of gloves that provide better protection in extreme cold, Toasty, which the company plans to sell for $23.00 per pair. At this price the company expects to sell 600 pairs per month of the product . The variable expense would be $18.40 per pair. The company's 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.) WARNA HLANDS Contribution Income Statement Warm Cozy Toasty Total 5 0 05 0 0.00 $ 0 0.005 0 0.00 $ b. Compute the company's 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 collar amount and percentage answer to 2 decimal places.) b. Compute the company's 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.) Break-even sales dollars Margin of safety in dollars Margin of safety in percentage
