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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 54,000 units of each product. Sales and costs for each product follow Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (32% rate) Net income Product T $ 885,600 531,360 354,240 210,240 144,000 46,080 $ 97,920 Product 0 $ 885,600 177,120 708,480 564,480 144,000 46,080 $ 97,920 2. Assume that the company expects sales of each product to decline to 37,000 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. Enter losses and tax benefits, if any, as negative values.) HENNA CO Forecasted Contribution Margin Income Statement ProductT Product O Total Units S Per unit Total S Per unit Total Sales ariable cost Contribution margin Fixed costs ncome before taxes ncome taxes (tax benefit) Net income (loss)
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