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Mount Carmel Company sells only two products, Product A and Product B. Selling price Product A Product B Total $40 $50 Variable cost per
Mount Carmel Company sells only two products, Product A and Product B. Selling price Product A Product B Total $40 $50 Variable cost per unit 24 40 Total fixed costs $840,000 Mount Carmel sells two units of Product A for each unit it sells of Product B. Mount Carmel faces a tax rate of 30%. Required: 1. What is the breakeven point in units for each product assuming the sales mix is 2 units of Product A for each unit of Product B? 2. How many units of each product would be sold if Mount Carmel desires an after-tax net income of $73,500, facing a tax rate of 30%? 3. Calculate margin of safety percentage and degree of operating leverage if 60,000 units of A and 30,000 units of B have been sold.
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