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	$2,000,000	$2,000,000
Variable Costs	1,600,000	250,000
Contribution Margin	400,000	1,750,000
Fixed Costs	125,000	1,475,000
Income before taxes	275,000	275,000
Income Taxes(32% rate)	88,000	88,000
Net Income	$187,000	187,000

1. Compute the break-even point in dollars sales for each product. (round the answer to whole dollars)

2. Assume that the company expects sales of each product to decline to 30,000 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.

3. Assume the company expects sales of each product to increase to 60,000 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).