Problem 21-4A (Algo) Break-even analysis, different cost structures, and income calculations LO C2, A1, P2

Skip to question

[The following information applies to the questions displayed below.]

Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 43,000 units of each product. Income statements for each product follow.

	Carvings	Mementos
Sales	$ 761,100	$ 761,100
Variable costs	608,880	76,110
Contribution margin	152,220	684,990
Fixed costs	33,220	565,990
Income	$ 119,000	$ 119,000

Problem 21-4A (Algo) Part 2

2. Assume that the company expects sales of each product to decline to 26,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products).

Note: Round "per unit" answers to 2 decimal places.