Multiple product CVP analysis-incomplete data Istanbul Import/Export Company distrib- utes dried nuts and fruits to wholesalers and grocery store chains. The company deals exclusively in dried apricots, almonds and figs. The owner nurtured the business from a corner grocery store to a corporation which had sales of $30,000,000 this year. The owner boasts that the firm has been growing significantly and this year shows profits even after paying the maximum income tax rate of 30 percent. The owner believes that the company will have no trouble achieving the target profit after income taxes for next year of $3,500,000.

As part of the growth strategy the company installed computers to handle accounting transactions and help in decision making. The person slated to take charge of the accounting information system, Nutt Twobryte, was hired just last month and encouraged to become familiar with the computer system by the owner. Twobryte is anxious to make a good impression and learn quickly as he is soon scheduled to make a presentation to top management on the company's cost-volume-profit situation and provide recommendations for the future.

Yesterday, Twobryte came to work looking very depressed and asked for your help. It seems that as Twobryte was working on the spreadsheets last night he inadvertently deleted a substantial portion of the file which contained vital information about the company's CVP relationships. Nutt seems especially anxious because he had failed to make backup copies of the spreadsheet. He thinks that's the end of his career as he thinks there is no way he can retrieve the data for the CVP presentation he is going to make to top management tomorrow. You call up the spreadsheet file and retrieve the following:

Margin of safety ratio, 35 percent; net income before tax $3,000,000; break-even sales this year $15,000,000; anticipated increase in fixed costs of $500,000 for next year; sales mix this year—dried almonds 40%, dried apricots 25% and dried figs 35%, which is not expected to change next year; and variable costs as a percentage of sales are expected to be 5% higher for next year than this year.

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REQUIRED a. Calculate fixed costs for this year. b. Calculate the total sales dollars of dried almonds, apricots, and figs that the company sold this year. c. What is the total break-even sales dollars for next year? For each product line? d. Calculate for next year the total sales dollars necessary for Istanbul Co. to reach its targeted profit after tax. Break this down into sales for each product line.