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Sowed Required information The following information applies to the questions displayed below.) Henna Co. produces and sells

Required information Net income 82 You 82,00 2. Assume that the company expects sales of each product to decline to 27,000 un

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Answer #1
HENNA CO.
Forecasted Contribution margin Income statement
Product T Product O Total
Units $ per unit Total $ per unit Total
Sales 27000 $17.60 $4,75,200 $17.60 $4,75,200 $9,50,400
Less: Variable cost 27000 $10.56 $2,85,120 $3.52 $95,040 $3,80,160
Contribution margin 27000 $7.04 $1,90,080 $14.08 $3,80,160 $5,70,240
Less: Fixed Cost $1,87,760 $4,97,520 $6,85,280
Net Income before tax/(Loss) $2,320 -$1,17,360 -$1,15,040
Less: Income tax/(tax benefit) @ 32% $742 $37,555 $36,813
Net Income/(Loss) $1,578 -$79,805 -$78,228
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