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Required information [The following information applies to the questions displayed below.] 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 40,000 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 $ 720,000 576,000 144,000 34,000 110,000 35,200 $ 74,800 Producto $ 720,000 144,000 576,000 466,000 110,000 35, 200 $ 74,800 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: 1 Choose Denominator: Contribution Margin Ratio Contribution margin ratio 0 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 0 2. Assume that the company expects sales of each product to decline to 23,000 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 Product T Producto Units $ Per unit Total $ Per unit Total Total Contribution margin Net income (loss) 3. Assume that the company expects sales of each product to increase to 54,000 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 shown with columns for each of the two products (assume a 32% tax rate). (Round "per unit" answers to 2 decimal places.) HENNA CO. Forecasted Contribution Margin Income Statement Product T Product O Total Units $ Per unit Total $ Per unit Total $ 0 $ 0 $ 0 0 0 0 Contribution margin 0 0 Net income SS) $ 0

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