Managerial Accounting: P22-2A Edge Equipment Co. manufactures and markets a number of rope products

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Managerial Accounting

P22-2A CVP Analysis and Charting (Req 1&3 only)
Edge Equipment 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 year’s plans call for a $150 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $200,000, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $100 per 100 yards of XT rope

1. Estimate Product XT’s break-even point in terms of (1 unit = 100 yards.) (Do not round intermediate calculations.)
a. sales units
b. sales dollars
3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point
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