Answered step by step
Verified Expert Solution
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 46,000 units of each product. Sales and costs for each product follow. |
Product T | Product O | |||||||
Sales | $ | 800,400 | $ | 800,400 | ||||
Variable costs | 640,320 | 160,080 | ||||||
Contribution margin | 160,080 | 640,320 | ||||||
Fixed costs | 32,080 | 512,320 | ||||||
Income before taxes | 128,000 | 128,000 | ||||||
Income taxes (35% rate) | 44,800 | 44,800 | ||||||
Net income | $ | 83,200 | $ | 83,200 | ||||
Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage . Cuimgude the brea-les for each product Enter CM ratio as percentage rounded to 2 decimal places.) Product T Contribution Margin Ratio Choose Numerator: I Ch Choose Denominator: Contribution Margin Ratio Contribution margin ratio = Choose Numerator: Choose Denominator: Break-Even Point in Dollars = Break-even point in dollars Product C Contribution margin ratio reak-Even Point in Dollars Break-even point in dollars =
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started