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 58,000 units of each product. Sales and costs for each product follow.

	Product T					Product O
Sales		$	974,400				$	974,400
Variable costs			779,520					194,880
Contribution margin			194,880					779,520
Fixed costs			46,880					631,520
Income before taxes			148,000					148,000
Income taxes (32% rate)			47,360					47,360
Net income		$	100,640				$	100,640

1. a) Calculate the contribution Margin ration and Compute the break-even point in dollar sales for each product.

b) Assume that the company expects sales of each product to decline to 41,000 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 as just shown with columns for each of the two products (assume a 32% tax rate). Also, assume that any loss before taxes yields a 32% tax benefit.(Round "per unit" answers to 2 decimal places.)

c) Assume that the company expects sales of each product to increase to 72,000 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). (Round "per unit" answers to 2 decimal places.)