Problem 21-3A Break-even analysis LO P2, P3

Problem 21-3A Break-even analysis LO P2, P3 [The following information applies to the questions displayed below.] Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $260 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $304,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $182 per 100 yards of XT rope. Problem 21-3A Part 1 1. Estimate Product XT's break-even point in terms of sales units and sales dollars. (1 unit = 100 yards) (Do not round intermediate calculations.) Contribution Margin per 100 yds. $ 0 Contribution margin Contribution Margin ratio Choose Numerator: 1 Choose Denominator: Contribution Margin Ratio Contribution margin ratio / 0 1(a) Estimate Product XT's break-even point in terms of sales units. (1 unit = 100 yards) Choose Numerator: 1 Choose Denominator: = Break-Even Units / Break-even units 1(b) Estimate Product XT's break-even point in terms of sales dollars. Choose Numerator: 1 Choose Denominator: = Break-Even Dollars / Break-even dollars 0 Problem 21-3A Break-even analysis LO P2, P3 [The following information applies to the questions displayed below.] Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $260 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $304,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $182 per 100 yards of XT rope. Problem 21-3A Part 2 2. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point. PRAVEEN CO. Contribution Margin Income Statement (at Break-Even) Product XT Units $ per unit Total Sales $ 260 Less: Variable cost 182 0 Contribution margin Less: Fixed costs 304,200 $ (304,200) Net income