Verify the break-even point by preparing an income statement

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Reference no: EM131810303

Franklin Company produces two products. Budgeted annual income statements for the two products are provided here:

	Power								Lite								Total
	Budgeted	Per				Budgeted			Budgeted	Per				Budgeted			Budgeted	Budgeted
	Number	Unit				Amount			Number	Unit				Amount			Number	Amount
Sales	100	@	$	600	=	$	60,000		900	@	$	560	=	$	504,000		1,000	$	564,000
Variable cost	100	@		320	=		(32,000	)	900	@		430	=		(387,000	)	1,000		(419,000	)
Contribution margin	100	@		280	=		28,000		900	@		130	=		117,000		1,000		145,000
Fixed cost							(11,000	)							(90,500	)			(101,500	)
Net income						$	17,000							$	26,500			$	43,500

Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.

Power	Lite	Total
Sales
Variable costs
Contribution margin
Fixed cost
Net income (Loss)

Determine the margin of safety based on the combined sales of the two products. (Round your answer to 1 decimal place.(i.e., .234 should be entered as 23.4))

Margin of safety

Reference no: EM131810303

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