Question

Required information 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 XI. 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 year's plans cal for a $190 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $334,400, up to a maximum capacity of 550,000 yards of rope Forecasted variable costs are $11 per 100 yards of XT rope. 2. 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 Sper unit Total Contribution margin

Answer 1

PRAVEFN CO. Condachytian margio Încome StatementCal Puak Even) – Paodud XT lUnide 4400 $ 4400 4400 8 Total uni! $ pee Sales 190 1$836.000 hess: Variable cast Contrichulion mangin hessi Fexed costs Net income 114 8501600 $3344100 $ 334400 76. Explanalions: in uncls Fexed costs mangin per Break even remit Kontribution $ 3 34, 400 $ 76 h400 units uned ¥Contribulion mergen pen Variable coss ) (Sales $ 76

Sales ( 4400X $ 190) hess: Vaniable conl (4400x f114) f 836,000 ļ 501,600 Con-tribulion mangen ( H400X976) thess: foxed cast 9 334400 334400 CAro) Ned income ?