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. 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:WarmCozy$15.00Selling price per pairVariable expenses per pairNumber of pairs sold monthly$10.00$ 2.50$ 7.502,100 units700 unitsFixed expenses are $2,520 per month. Break-even sales dollarsMargin of safety in dollarsMargin of safety in percentage%

Break-even point refers to a point at which the company earns neither profit nor deficit. If the…

Answered: Compute the break-even point in sales…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 monthly Warm $6.00 $ 1.50 Fixed expenses are $2,880 per month. Required: 1. Assuming the sales mix above, do the following: $ 3,000 units 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.) WARM HANDS Contribution Income Statement Warm 0 Cozy $9.00 $4.50 1,000 units % 0.00 $ Cozy 0 % 0.00 $ Total 0 0 % 0.00
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 monthly Fixed expenses are $2,340 per month. Required: 1. Assuming the sales mix above, do the following: Break-even sales dollars Margin of safety in dollars Margin of safety in percentage Warm $10.00 $ 2.50 2,700 units $ 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.) WARM HANDS Contribution Income Statement Warm 0 % 0.00 $ Cozy $ 15.00 $ 7.50 % 900 units Cozy 0 % 0.00 $ Total 0 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…
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