Henna Company produces and sells two products, Carvings and Mementos. It manufactures theseproducts in separate factories and markets them through different channels. They have no shared costs.This year, the company sold 53,000 units of each product. Income statements for each product follow.SalesVariable costsContribution marginFixed costsIncomeSalesVariable costContribution marginFixed costsIncome (loss)Carvings$ 863,900604,730259, 170116,170$ 143,000 $ 143,0002. Assume that the company expects sales of each product to decline to 36,000 units next year with no change in uniselling price. Prepare a contribution margin income statement for the next year (as shown above with columns for eachthe two products). (Round "per unit" answers to 2 decimal places.)UnitsMementos$ 863,90086,390777,510634,510HENNA COMPANYContribution Margin Income StatementCarvings36,00036,00036,000$ Per unit69$Total00Mementos$ Per unit$$EATotal000$HA$Total0000

Contribution margin takes into consideration only variable expenses of the business while net income…

Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Sales Variable cost Contribution margin Fixed costs Income (loss) Carvings $ 863,900 604,730 259, 170 116,170 $ 143,000 2. Assume that the company expects sales of each product to decline to 36,000 units next year with no change in un selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for ea the two products). (Round "per unit" answers to 2 decimal places.) Units Mementos $ 863,900 86,390 777,510 634,510 $ 143,000 HENNA COMPANY Contribution Margin Income Statement Carvings 36,000 36,000 36,000 $ Per unit Total 0 0 Mementos $ Per unit $ EA Total 0 $ 0 0 69 Total O 0 0

Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Sales Variable cost Contribution margin Fixed costs Income (loss) Carvings $ 863,900 604,730 259, 170 116,170 $ 143,000 2. Assume that the company expects sales of each product to decline to 36,000 units next year with no change in un selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for ea the two products). (Round "per unit" answers to 2 decimal places.) Units Mementos $ 863,900 86,390 777,510 634,510 $ 143,000 HENNA COMPANY Contribution Margin Income Statement Carvings 36,000 36,000 36,000 $ Per unit Total 0 0 Mementos $ Per unit $ EA Total 0 $ 0 0 69 Total O 0 0

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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A company produces and sells two products. It sells these products through different channels, and makes them in separate factories. The products have no shared costs. This year there were 42,000 units of each product sold. Contribution margin income statements follow. Sales Variable costs Contribution margin Fixed costs Income Product 1 Complete this question by entering your answers in the tabs below. Product 2 Product 1 $ 735,000 441,000 294,000 110,500 $ 183,500 Numerator For Product 1, compute the contribution margin ratio, the break-even point in dollar sales, and the degree of operating leverage. If sales in dollars increase by 10% for this product, compute income. Numerator Product 2 $ 735,000 73,500 661,500 478,000 $ 183,500 1 Contribution Margin Ratio Denominator Break-Even Point in Dollars Denominator = Contribution margin ratio Break-even point in dollars 0
Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 44,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Contribution margin Income (loss) Carvings $ 774,400 464, 640 2. Assume that the company expects sales of each product to decline to 27,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) Mementos $ 774,400 154,880 Units 619,520 309,760 187,760 497,520 $ 122,000 $ 122,000 HENNA COMPANY Contribution Margin Income Statement Carvings $ Per unit $ Total 01 Mementos $ Per unit $ $ Total 0 0 0 $ $ Total 0 0 0 0
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! Required information [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 45,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 787,500 551,250 236,250 111,250 Mementos $ 787,500 78,750 708,750 583,750 $ 125,000 $ 125,000 2. Assume that the company expects sales of each product to decline to 28,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) HENNA COMPANY Contribution Margin Income Statement Carvings Mementos Units Total $ Per unit Total $ Per unit Total Sales 28,000 $ 0 $ 0…
Required information [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income 3. Assume that the company expects sales of each product to increase to 67,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) Sales Variable cost Contribution margin Fixed costs Income (loss) Mementos $ 863,900 Carvings $ 863,900 604,730 259, 170 116,170 86,390 777,510 634,510 $ 143,000 $ 143,000 HENNA COMPANY Contribution Margin Income Statement Carvings Units 67,000…
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[The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 44,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income 3. Assume that the company expects sales of each product to increase to 58,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) Contribution margin Income (loss) Carvings $ 774,400 464, 640 309,760 Mementos $ 774,400 154,880 619,520 187,760 497,520 $ 122,000 $ 122,000 HENNA COMPANY Contribution Margin Income Statement Carvings Units $ Per unit Total Mementos $ Per unit Total Total
A manufacturing company decides which of three mutually exclusive products to make in its factory on the basis of maximising the company's throughput accounting ratio. Current data for the three products is shown in the following table: Product X Product Y Product Z $20 Selling price per unit $60 $40 Direct material cost per unit $40 $10 $16 Machine hours per unit 10 20 2.5 Total factory costs (excluding direct materials) are $150,000. The company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted. Which of the following actions would improve the company's existing throughput accounting ratio? Increase the selling price of product Z by 10% Increase the selling price of product Y by 10% Reduce the material cost of product Z by 5% O Reduce the material cost of product Y by 5%
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[The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 42,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Problem 18-4A (Algo) Part 1 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratlo as percentage rounded to 2 decimal places.) Contribution Margin Ratio Numerator: Break-Even Point in Dollars Numerator: Contribution Margin Ratio Break-Even Point in Dollars 1 1 1 1 Carvings $ 747,600 523,320 224,280 Mementos $ 747,600 149,520 598,080 108,280 482,080 $ 116,000 $ 116,000 1 PRODUCT CARVINGS Denominator: Denominator: PRODUCT MEMENTOS = IL 11 Contribution margin ratio Break-even point in dollars Contribution margin ratio Break-even point…
Indigo Chance Co. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below: Computers VG Systems Total Sales $720,000 $480,000 $1,200,000 Variable costs 504,000 384,000 888,000 Contribution margin $216,000 $96,000 312,000 Fixed costs 255,060 Net income $56,940 (a) Determine the sales mix and contribution margin ratio for each division. Sales mix Computers VG Systems
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