(Comprehensive; multiproduct) Greenbacks Flooring makes three types of artificial turf: astro, golf, and lawn. The company’s tax rate is 40 percent.

The following costs are expected for 2006:

a. Calculate the break-even point for 2006.

b. How many square yards of each product are expected to be sold at the break-even point?

c. If the company wants to earn pre-tax profits of $800,000, how many square yards of each type of turf would it need to sell? How much total revenue would be required?

d. If the company wants to earn an after-tax profit of $680,000, determine the revenue needed using the contribution margin percentage approach.

e. If the company achieves the revenue determined in part (d), what is the margin of safety (1) in dollars and (2) as a percentage?

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Astro Golf Lawn Variable costs (on a per-square-yard basis) Direct material $10.40 $6.50 $17.60 Direct labor 3.60 0.80 12.80 Production overhead 2.00 0.30 3.50 Selling expense 1.00 0.50 4.00 Administrative expense 0.40 0.20 0.60 Fixed overhead $760,000 Fixed selling expense 240,000 Fixed administrative expense 200,000 Per-yard expected selling prices are as follows: astro, $32.80; golf, $16.00; and lawn, $50.00. The expected sales mix is as follows: Square yards Astro Golf Lawn 9,000 72,000 6,000