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Island Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Hawaiian Fantasy Tahitian Joy Selling price per unit 5 20 $ 125 variable expense per unit 14 25 Number of units sold annually 30,000 5,200 Fixed expenses total $652,400 per year.
Required:
Assuming the sales mix given above, do the following:
Question a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole.
Question b. Compute the company's break-even point in dollar sales.
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