Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.

	Product T					Product O
Sales		$	800,000				$	800,000
Variable costs			560,000					100,000
Contribution margin			240,000					700,000
Fixed costs			100,000					560,000
Income before taxes			140,000					140,000
Income taxes (32% rate)			44,800					44,800
Net income		$	95,200				$	95,200

3. Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit selling price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate).

HENNA cO Forecasted Contribution Margin Income Statement Product T Product O Total Units $ Per unit Total $ Per unit Total Contribution margin Net income (loss)