Puleva S.A. of Madrid Spain, manufactures and sells 2 products of luxury finished cutlery – A and B. Current monthly sales and cost information is provided below for each case: A B Selling price per unit 400 600 240 120 200 80 Fixed expenses are $66,000 per month. Required: The company has just introduced a new product, Cano, that the company plans to sell for $800 per case. The variable cost of production is expected to be $600, and expectations are for sales of 40 cases per month. The fixed expenses are not expected to increase. Compute the company’s new break-even point as a whole and prepare a new contribution margin income statement for each product and the total company sales.
Puleva S.A. of Madrid Spain, manufactures and sells 2 products of luxury finished cutlery – A and B. Current monthly sales and cost information is provided below for each case: A B Selling price per unit 400 600 240 120 200 80 Fixed expenses are $66,000 per month. Required: The company has just introduced a new product, Cano, that the company plans to sell for $800 per case. The variable cost of production is expected to be $600, and expectations are for sales of 40 cases per month. The fixed expenses are not expected to increase. Compute the company’s new break-even point as a whole and prepare a new contribution margin income statement for each product and the total company sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Puleva S.A. of Madrid Spain, manufactures and sells 2 products of luxury finished cutlery – A and B. Current monthly sales and cost information is provided below for each case:
| A | B | |
| Selling price per unit | 400 | 600 |
| 240 | 120 | |
| 200 | 80 |
Fixed expenses are $66,000 per month.
Required: The company has just introduced a new product, Cano, that the company plans to sell for $800 per case. The variable cost of production is expected to be $600, and expectations are for sales of 40 cases per month. The fixed expenses are not expected to increase. Compute the company’s new break-even point as a whole and prepare a new contribution margin income statement for each product and the total company sales.
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