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. Mementos $ 774,400 Sales Carvings $ 774,400 464,640 309,760 Variable costs Contribution margin Fixed costs 154,880 619,520 187,760 497,520 Income $ 122,000 $ 122,000 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
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.
Carvings
$ 774,400
464,640
Mementos
$ 774,400
Sales
Variable costs
154,880
309,760
619,520
Contribution margin
Fixed costs
187,760
497,520
Income
$ 122,000 $ 122,000
Required:
1. Compute the break-even point in dollar sales for each product (Enter CM ratio as percentage rounded to 2 decimal places.)
PRODUCT CARVINGS
Contribution Margin Ratio
Numerator:
Denominator:
Contribution margin ratio.
Break-Even Point in Dollars
Numerator:
Denominator:
Break-even point in dollars
PRODUCT MEMENTOS
Contribution Margin Ratio
Contribution margin ratio
Break Even Point in Dollars
Break-even point in dollars
1
1
0
0
0
Transcribed Image Text: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. Carvings $ 774,400 464,640 Mementos $ 774,400 Sales Variable costs 154,880 309,760 619,520 Contribution margin Fixed costs 187,760 497,520 Income $ 122,000 $ 122,000 Required: 1. Compute the break-even point in dollar sales for each product (Enter CM ratio as percentage rounded to 2 decimal places.) PRODUCT CARVINGS Contribution Margin Ratio Numerator: Denominator: Contribution margin ratio. Break-Even Point in Dollars Numerator: Denominator: Break-even point in dollars PRODUCT MEMENTOS Contribution Margin Ratio Contribution margin ratio Break Even Point in Dollars Break-even point in dollars 1 1 0 0 0
3. Assume that the compeny 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" enswers to 2 decimal places.)
HENNA COMPANY
Contribution Margin income Statement
Carvings
Mementon
Total
Per anit
Total
$
$
Contribution margin
Income (los)
$
Units
$
0
Par unit
Total
05
19
D$
Transcribed Image Text:3. Assume that the compeny 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" enswers to 2 decimal places.) HENNA COMPANY Contribution Margin income Statement Carvings Mementon Total Per anit Total $ $ Contribution margin Income (los) $ Units $ 0 Par unit Total 05 19 D$
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education