Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. island novelties, incorporated, of palau makes two

Island Novelties, Incorporated, of Palau makes two products - Hawailan Fantasy and Tahitian Joy, Each...

50.1K

Verified Solution

Question

Accounting

image
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: Fixed expenses total $651,900 per year. 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 $50 each and that has variable expenses of $30 per unit. If the company can sell 12,000 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

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

Jiminy’s Cricket Farm issued a bond with 20 years to maturity and a semiannual coupon rate...

Advance Math
1.2K views

To process a workpiece 10 operations are interchangeable in their order. The economic-technological evaluation of each variant...

Geometry
1.2K views

Reveal Math 8th grade Q 17 Transversals of parallel lines name OQ and RT are...

Accounting
1.2K views

Part III High-low method of separating costs. The Mooney...

Accounting
1.2K views

Onslow Company purchased a used machine for $144,000 cash on January 2. On January 3,...

Accounting
1.2K views

14. MC.09-074 Ursula, an employee of Ficus Corporation, is 35 years old and plans to...

Accounting
1.2K views

Share Issuances for Cash Minaret, Inc., issued 10,000 shares of $50 par value preferred stock...

Accounting
1.2K views

Goodfellow Corporation reported insurance expense of $485 for the current year. The beginning and ending...

Accounting
1.2K views

Effect of transactions on cash flows State the effect (cash receipt or cash...

Accounting
1.2K views

2.Suppose you deposited $75,000 in a bank account that pays 2.50% with daily compounding based...

Accounting
1.2K views

BugKillers provides a quarterly pest control service for $93 a quarter. Its variable costs per...

Finance
1.2K views

) Suppose corporate earnings are taxed at the corporate level (tax rate tc) and that...