Problem 21-5A Part 2

2.

Assume that the company expects sales of each product to decline to 25,000 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 35% tax rate). Also, assume that any loss before taxes yields a 35% tax savings. (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		Product O		Total
	Units	$ Per unit	Total	$ Per unit	Total
Sales	25,000	$17.80	$445,000	$17.80	$445,000	$890,000
Variable cost	25,000	$12.46	311,500	$5.98	149,500	461,000
Contribution margin	25,000	$5.34	133,500	$5.98	149,500	283,000
Fixed costs						0
Income before taxes			133,500			133,500
Income taxes (tax benefit)
Net income (loss)

3.	Assume that the company expects sales of each product to increase to 56,000 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 35% tax rate). (Round "per unit" answers to 2 decimal places.)
	Forcasted Contribution Margin Income Statement (layed out like one abouve but I couldnt get them both to paste)