Question
Light Ltd. produces lighting fixtures. For the upcoming period, the company has provided the following budget information for two of its product lines: Product A
Light Ltd. produces lighting fixtures. For the upcoming period, the company has provided the following budget information for two of its product lines: Product A Product B Sales (units) 120,000 400,000 Sales $6,000,000 $48,000,000 Variable costs 2,400,000 38,000,000 Contribution margin $3,600,000 $10,000,000 Less: fixed costs 2,398,000 6,200,000 Operating profit (loss) $1,202,000 $ 3,800,000 If Light wishes to achieve a total net (after-tax) income of $7,000,000 and has a tax rate of 30%, how many units of Product B must it sell if the sales mix remains unchanged? a) 400,000 b) 547,000 c) 623,920 d) 743,920
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