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

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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

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