Question: Warm Hands, a smail company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runnersWarm and Cozy. Current revenue, cost,

 Warm Hands, a smail company based in Prince Edward Island, manufacturesand sells two types of lightweight gloves for runnersWarm and Cozy. Current

revenue, cost, and unit sales data for the two products appear below:

Fixed expenses are $3.510 per month. Required: 1. Assuming the sales mix

Warm Hands, a smail company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runnersWarm and Cozy. Current revenue, cost, and unit sales data for the two products appear below: Fixed expenses are $3.510 per month. Required: 1. Assuming the sales mix above, do the following: e. Prepare a contribution format income statement showing both dollars and percentage columns for each product and for the company as a whole. (Round percentage answers to 2 declmal pleces.) b. Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of Sales. (Do not round your Intermedlete calculatlons. Round percentage answer to 2 declmal pleces.) c. Compute the break-even point in units for the company as a whole and the margin of safety in both units (pairs of gloves) and percentage of sales. (Round percentage onswer to 2 declmal ploces.) d. Compute how many pairs of gloves must be sold overall if the company wants to make an after-tax target profit of $16.800 and the tax rate is 30% . Assume that the sales mix remains the same as shown above. 2. The company has developed another type of gloves that provide better protection in extreme cold. Toasty, which the company plans to sell for $20.00 per pair. At this price, the company expects to sell 400 pairs per month of the product. The variable expense would be $16.00 per pair. The company's fixed expenses would not change. a. Prepare another contribution format income statement, including sales of Toasty (sales of the other two products would not change). (Round percentege answers to 2 decimel pleces.) b. Compute the company's new break-even point in sales dollars for the company as a whole and the new margin of safety in both dollars and percentage of sales. (Round yosur break-even soles to the nearest whole dollor amount and percentegje answer to 2 decimal pleces.) 3. This part of the question is not part of your Connect assignment

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!