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Island Novelties, Inc., of Palau makes two products, Hawaiian Fantasy and Tahitian Joy. Present revenue, cost, and sales data for the two products follow:

	Hawaiian Fantasy	Tahitian Joy
Selling price per unit	$4.90	$7.35
Variable expenses per unit	$2.94	$1.47
Number of units sold annually	260	104

Fixed expenses total $580 per year. The Republic of Palau uses the U.S. dollar as its currency.

Requirement 1:

Assuming the sales mix given above, do the following:

(a)	Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. (Round your dollar values to 2 decimal places. Omit the "$" and "%" signs in your response.)

	Hawaiian Fantasy		Tahitian Joy		Total
	Amount	%	Amount	%	Amount	%
Sales	$		$		$
Variable expenses
Contribution margin	$		$
Fixed expenses
(Click to select) Net operating loss Net operating income					$

(b)	Compute the break-even point in dollars for the company as a whole and the margin of safety in both dollars and percent. (Round your answers to 2 decimal places. Omit the "$" and "%" signs in your response.)

Break-even point in dollars	$
Margin of safety	$
Margin of safety percentage	%

Requirement 2:

The company has developed a new product to be called Samoan Delight. Assume that the company could sell 52 units at $9.80 each. The variable expenses would be $7.35 each. The company's fixed expenses would not change.

(a)	Prepare another contribution format income statement, including sales of the Samoan Delight (sales of the other two products would not change). (Round your dollar values to 2 decimal places. Omit the "$" and "%" signs in your response.)

	Hawaiian Fantasy		Tahitian Joy		Samoan Delight		Total
	Amount	%	Amount	%	Amount	%	Amount	%
Sales	$		$		$		$
Variable expenses
Contribution margin	$		$		$
Fixed expenses
(Click to select) Net operating income Net operating loss							$

(b)	Compute the company's new break-even point in dollars and the new margin of safety in both dollars and percent. (Round your answers to 2 decimal places. Omit the "$" and "%" signs in your response.)

Break-even point in dollars	$
Margin of safety	$
Margin of safety percentage	%

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