Homework Help is Here – Start Your Trial Now!
Business
Accounting
Island Novelties, Incorporated, of Palau makes two products-Hawailan Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $325,000 per year Havallan Fantasy 5. 20 $ 13 15,000 Tahitian Joy $ 125 s se 5,100 Required: 1. Assuming the sales mix given above, do the following a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12.500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage

Island Novelties, Incorporated, of Palau makes two products-Hawailan Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $325,000 per year Havallan Fantasy 5. 20 $ 13 15,000 Tahitian Joy $ 125 s se 5,100 Required: 1. Assuming the sales mix given above, do the following a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12.500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
See similar textbooks
icon
Related questions
Question
Island Novelties, Incorporated, of Palau makes two products-Hawailan Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $325,000 per year Hawaiian Fantasy $ 20 $13 15,000 Check my wor Tahitian Joy $ 125 $ 50 5,100 Required: 1. Assuming the sales mix given above, do the following a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the comparty as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage
Transcribed Image Text:Island Novelties, Incorporated, of Palau makes two products-Hawailan Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $325,000 per year Hawaiian Fantasy $ 20 $13 15,000 Check my wor Tahitian Joy $ 125 $ 50 5,100 Required: 1. Assuming the sales mix given above, do the following a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the comparty as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two products does not change b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin of safety percentage
Req 1A Req 18 Reg 14 Req 2A Assuming the sales mix given above, do the following: Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. Req 18 Req 28 Req 2A Island Novelties, Incorporated Contribution Income Statement Hawaiian Fantasy Amount % Reg 14 Req 28 Island Novelties, Incorporated i Contribution Income Statement Tahitian Joy Hawaiian Fantasy Amount Tahitian Joy Amount % Amount < Req 1B The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format incom statement that includes Samoan Delight. Assume that sales of the other two products does not change. (Round your "Percentage" answers to 1 place (i.e 0.1234 should be entered as 12.3).) Req 18 > % Total Amount Samoan Delight Amount % Req 2B > % Total Amount 36 2 Sho
Transcribed Image Text:Req 1A Req 18 Reg 14 Req 2A Assuming the sales mix given above, do the following: Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. Req 18 Req 28 Req 2A Island Novelties, Incorporated Contribution Income Statement Hawaiian Fantasy Amount % Reg 14 Req 28 Island Novelties, Incorporated i Contribution Income Statement Tahitian Joy Hawaiian Fantasy Amount Tahitian Joy Amount % Amount < Req 1B The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: Prepare a revised contribution format incom statement that includes Samoan Delight. Assume that sales of the other two products does not change. (Round your "Percentage" answers to 1 place (i.e 0.1234 should be entered as 12.3).) Req 18 > % Total Amount Samoan Delight Amount % Req 2B > % Total Amount 36 2 Sho
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 8 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS