Problem 18-5A Break even analysis, different cost structures, and income calculations Question 2 and 3

Problem 18-5A Break-even analysis, different cost structures, and income calculations LO C2, A1, P4 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 43,000 units of each product Sales and costs for each product follow. 3 Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (30% rate) Net Income Product T $761,100 603.880 152,220 33,220 119,000 35.700 $ 83,300 Producto 5.761,100 76. 110 684,990 565,999 119,000 35,700 $ 83,300 Problem 18-5A Part 2 2. Assume that the company expects sales of each product to decline to 26.000 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 30% tax rate) Also assume that any loss before taxes ylelas a 30% tax benefit (Round "per unit answers to 2 decimal places. Enter losses and to benefits, if any, es negative values) 2. Assume that the company expects sales of each product to decline to 26,000 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 30% tax rate). Also, assume that any loss before taxes yields a 30% tax benefit. (Round "per unit" answers to 2 decimal places. Enter losses and tax benefits, if any, as negative values.) Total HENNA CO. Forecasted Contribution Margin Income Statement ProductT Producto Units $ Per unit Total 5 Per unit Total 26,000 $ 26.000 0 26.000 0 $ 0 0 0 Sales Variable cost Contribution margin Flved costs Income (Loss) before taxes Income taxes (tax benefit) Not Income (loss) 0 0 0 3. Assume that the company expects sales of each product to increase to 57.000 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 30% tax rate) (Round "per unit" answers to 2 decimal places.) HENNA CO Forecasted Contribution Margin Income Statement Product T Producto Units $ Per unit Total 5 Per unit Total Total Contribution margin Net income (los)