(Multiproduct firm) Anaheim Company produces and sells V8 car engines and lawn mower engines in a sales...
Question:
(Multiproduct firm) Anaheim Company produces and sells V8 car engines and lawn mower engines in a sales mix of three V8s to five lawn mower engines. Selling prices for the V8 and lawn mower engines are $1,200 and $240, respectively; respective variable costs are $480 and $160. The com¬ pany’s annual fixed costs are $1,800,000. Compute the sales volume of each engine type needed to:
a. Break even.
b. Earn $800,000 of income before tax.
C. Earn $800,000 of income after tax, assuming a 30 percent tax rate.
d. Earn 12 percent on sales revenue in before-tax income.
e. Earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9780324235012
6th Edition
Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn