Problem 2 Solve the given problem based on the following information. Crouch Corp. manufactures and markets various
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| Problem 2 | |||||||||
| Solve the given problem based on the following information. | |||||||||
| Crouch Corp. manufactures and markets various mountaineering products. | |||||||||
| Crouch Corp.'s managers are looking at the future of Product XYZ, which has | |||||||||
| not been as profitable as anticipated. Next year, the company plans to sell | |||||||||
| 1,500 units of Product XYZ at a price of $220 each. The fixed costs are projected | |||||||||
| to be $225,000, for up to a maximum capacity of 4,500 units of Product XYZ for the year. | |||||||||
| Variable costs are projected to be $55 per unit. | |||||||||
| Create a contribution margin income statement at the break-even point, including: | |||||||||
| Sales | |||||||||
| Variable costs | |||||||||
| Fixed costs | |||||||||
| Round the numbers to the nearest whole number. | |||||||||
| Crouch Corp. Contribution Margin Income Statement (at break-even point) for Product XYZ | |||||||||
| Sales (1,500 units @ $220 each) | |||||||||
| Less: Variable cost (1,500 units @ $55 each) | |||||||||
| Contribution margin (1,500 units at $165 each) | |||||||||
| Less: Fixed costs (given) | |||||||||
| Net income | |||||||||
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