ompute the break-even point in dollar sales for each product. 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. Carvings Mementos Sales $ 747,600 $ 747,600 Variable costs 523,320 149,520 Contribution margin 224,280 598,080 Fixed costs 108,280 482,080 Income $ 116,000 $ 116,000
ompute the break-even point in dollar sales for each product. 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. Carvings Mementos Sales $ 747,600 $ 747,600 Variable costs 523,320 149,520 Contribution margin 224,280 598,080 Fixed costs 108,280 482,080 Income $ 116,000 $ 116,000
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1MC: The amount of a units sales price that helps to cover fixed expenses is its ____________________. A....
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Compute the break-even point in dollar sales for each product.
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.
Carvings | Mementos | |
---|---|---|
Sales | $ 747,600 | $ 747,600 |
Variable costs | 523,320 | 149,520 |
Contribution margin | 224,280 | 598,080 |
Fixed costs | 108,280 | 482,080 |
Income | $ 116,000 | $ 116,000 |
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Assume that the company expects sales of each product to decline to 25,000 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).
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