Question
[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
[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.
Product T | Product O | ||||||||
Sales | $ | 761,100 | $ | 761,100 | |||||
Variable costs | 608,880 | 76,110 | |||||||
Contribution margin | 152,220 | 684,990 | |||||||
Fixed costs | 33,220 | 565,990 | |||||||
Income before taxes | 119,000 | 119,000 | |||||||
Income taxes (32% rate) | 35,700 | 35,700 | |||||||
Net income | $ | 83,300 | $ | 83,300 | |||||
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.) Hint: Prepare a Forcasted contribution margin income statement for Products T and O using per unit and total values.
I believe the rows in order should be sales, variable cost, contriubtion margin, fixed costs, income(loss) before taxes, income taxes(tax benefit), net income(loss) |
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