Problem 18-3A CVP analysis and charting 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 years plans call for a $230 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $331,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $161 per 100 yards of XT rope.

Problem 18-3A Part 2

3. 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
Less:	Variable cost
	Contribution margin
Less:	Fixed costs
	Net income