Required informationProblem 18-4A (Static) Break-even analysis, different cost structures, and income calculations LO C2, A1,P2[The following information applies to the questions displayed below.]Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separatefactories and markets them through different channels. They have no shared costs. This year, the company sold 50,000units of each product. Income statements for each product follow.SalesVariable costs.Contribution marginFixed costsIncomeProblem 18-4A (Static) Part 3SalesVariable costContribution marginCarvings$ 2,000,0001,600,000400,000125,000$ 275,0003. Assume that the company expects sales of each product to increase to 60,000 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).Fixed costsIncome (loss)UnitsMementos$ 2,000,000250,0001,750,0001,475,000$ 275,000HENNA COMPANYContribution Margin Income StatementCarvings$ Per unit$Total00$ Per unitMementos.$Total00$Total000

Contribution margin income statement is a format of income statement in which variable cost is…

Answered: 3. Assume that the company expects…

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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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 46,000 units of each product. Income statements for each product follow. Carvings Mementos Sales Variable costs Fixed costs Income $ 800,400 640,320 $ 800,400 160,080 Contribution margin 160,080 32,080 640,320 512,320 $ 128,000 $ 128,000 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) Contribution Margin Ratio PRODUCT CARVINGS Numerator: 1 Denominator: Contribution margin / Sales Break-Even Point in Dollars Numerator: Total fixed costs Contribution margin ratio 0 Denominator: Sales = Break-even point in dollars 0 PRODUCT MEMENTOS Contribution Margin Ratio Contribution margin ratio 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…
! 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…
Different Costs for Different Purposes, Cost-Volume-Profit-Relationships Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Hixson produces and sells 25,000 units, its unit costs are as follows: Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 25,000 units? What is the total amount of period costs incurred to sell 25,000 units? 2. If 24,000 units are produced, what is the variable manufacturing cost per unit produced? What is the average fixed manufacturing cost per unit produced? 3. If 26,000 units are produced, what is the variable manufacturing cost per unit produced? What is the average fixed manufacturing cost per unit produced? 4. If 27,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? 5.…
Required information [The following information applies to the questions displayed below.] Information for Pueblo Company follows: Sales Revenue Less: Total Variable Cost Contribution Margin Weighted average CM ratio Product A Product B $ 60,000 $ 31,490 $ 28,510 Required: Determine Pueblo's (overall) weighted-average contribution margin ratio. Note: Do not round intermediate calculations. % $ 57,000 $ 11,800 $ 45,200
Required information [The following information applies to the questions displayed below.] Information for Pueblo Company follows: Sales Revenue Less: Total Variable Cost Contribution Margin Weighted average CM ratio Product A $ 52,000 $ 10,000 $ 42,000 Required: Determine Pueblo's (overall) weighted-average contribution margin ratio. Note: Do not round intermediate calculations. % Product B $ 66,000 $18,320 $ 47,680
[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…
! 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 51,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Carvings $ 821,100 492,660 328,440 187,440 Sales Variable cost Contribution margin Fixed costs Income (loss) Mementos $ 821,100 82,110 738,990 597,990 $ 141,000 $ 141,000 2. Assume that the company expects sales of each product to decline to 34,000 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.) Units HENNA COMPANY Contribution Margin Income Statement Carvings 34,000…
Required information [The following information applies to the questions displayed below} Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct lebor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed adeinistrative expense Sales commissions Variable adninistrative expense Average Cost per Unit 26.60 $ 4.10 $41.50 2 4.00 $ 3.60 $42.00 21.00 $0.50 13. If the selling price is $22.60 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution margin per unit Required information 15 [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit $…
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
Required information Skip to question [The following information applies to the questions displayed below.] The following data are available for product no. CK74, manufactured and sold by Ruby Corporation: Maximum capacity with present facilities 3,500 units Total fixed cost (per period) $ 798,000 Variable cost per unit $ 115.00 Sales price per unit $ 185.00 The number of units of CK74 that Ruby must sell to break- even is:
[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

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3. Assume that the company expects sales of each product to increase to 60,000 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).