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 50,000 units of each product. Income statements for each product follow Sales Variable costs Contribution margin Fixed costs Income Carvings $ 2,000,000 1,600,000 400,000 125,000 $ 275,000 Mementos $ 2,000,000 250,000 1,750,000 1,475,000 $ 275,000 2. Assume that the company expects sales of each product to decline to 30.000 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)
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 50,000 units of each product. Income statements for each product follow Sales Variable costs Contribution margin Fixed costs Income Carvings $ 2,000,000 1,600,000 400,000 125,000 $ 275,000 Mementos $ 2,000,000 250,000 1,750,000 1,475,000 $ 275,000 2. Assume that the company expects sales of each product to decline to 30.000 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)
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 50,000
units of each product. Income statements for each product follow
Sales
Variable costs
Contribution margin
Fixed costs
Income
Contribution margin
Carvings
$ 2,000,000
1,600,000
400,000
125,000
$ 275,000
2. Assume that the company expects sales of each product to decline to 30.000 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).
Income (loss)
Units
Mementos
$ 2,000,000
250,000
1,750,000
1,475,000
$ 275,000
HENNA Company
Contribution Margin Income Statement
Carvings
$ Per unit
$
Total
0
0
Mementos
$ Per unit
$
Total
0
0 $
Total
0
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F48a8e91d-36bb-4c3b-8c5d-260822cd50c2%2F66f0f966-710a-4c7c-9042-db5bf3cd17c5%2F1yf1jp_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 50,000
units of each product. Income statements for each product follow
Sales
Variable costs
Contribution margin
Fixed costs
Income
Contribution margin
Carvings
$ 2,000,000
1,600,000
400,000
125,000
$ 275,000
2. Assume that the company expects sales of each product to decline to 30.000 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).
Income (loss)
Units
Mementos
$ 2,000,000
250,000
1,750,000
1,475,000
$ 275,000
HENNA Company
Contribution Margin Income Statement
Carvings
$ Per unit
$
Total
0
0
Mementos
$ Per unit
$
Total
0
0 $
Total
0
0
0
0
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