Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

image text in transcribed

Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) Product T Contribution Margin Ratio Choose Numerator: / Choose Denominator: = Contribution Margin Ratio Contribution margin ratio / Break-Even Point in Dollars Choose Numerator: Choose Denominator: Break-Even Point in Dollars Break-even point in dollars / 0 Producto Contribution Margin Ratio / Contribution margin ratio Break-even Point in Dollars Break-even point in dollars

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

World Class Internal Audit Tales From My Journey

Authors: Norman Marks

1st Edition

1500791962, 978-1500791964

More Books

Students also viewed these Accounting questions