Question

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 56,000 units of each product. Sales and costs for each product follow. Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (35% rate) Net income Product T $ 929,600 650, 720 278,880 132,880 146,000 51,100 $ 94,900 Product o $ 929,600 185,920 743,680 597,680 146,000 51,100 $ 94,900

Answer 1

Requirement 1 Requirement 2 Product T Contribution Margin ratio Choose numerator Contribution Margin 278,880.00 ./ Choose denominator = Contribution marign ratio ./ Sales = Contribution marign ratio / $ 929,600.00 = 30.00% Henna Co Forecasted Contribution Margin Income statement Product T Product O Total Per unit Total Per unit Total 39000 $ 16.60 $ 647,400.00 $ 16.60 $ 647,400.00 $ 1,294,800.00 39000 $ 11.62 $ 453,180.00 $ 3.32 $ 129,480.00 $ 582,660.00 39000 $ 4.98 $ 194,220.00 $ 13.28 $ 517,920.00 $ 712,140.00 $ 132,880.00 $ 597,680.00 $ 730,560.00 $ 61,340.00 $ (79,760.00) $ (18,420.00) $ 21,469.00 $ (27,916.00) $ (6,447.00) $ 39,871.00 $ (51,844.00) $ (11,973.00) Sales variable costs Contribution Margin Fixed costs Income (loss) before taxes Income taxes Net Income / (loss) Break Even Point in Dollars : Choose numerator Total Fixed Costs 132,880.00 ./ Choose denominator - Break Even point in dollars ./ Contribution marign ratio = Break Even point in dollars / 30.00% = $ 442,933.33 Product o Requirement 3 Contribution Margin ratio Choose numerator Contribution Margin $ 743,680.00 ./ Choose denominator = Contribution marign ratio ./ Sales - Contribution marign ratio / $ 929,600.00 = 80.00% Total Break Even Point in Dollars : Choose numerator Total Fixed Costs 597,680.00 Henna Co Forecasted Contribution Margin Income statement Product T Product O Per unit Total Per unit Total 70000 $ 16.60 $1,162,000.00 $ 16.60 $1,162,000.00 70000 $ 11.62 $ 813,400.00 $ 3.32 $ 232,400.00 70000 $ 4.98 $ 348,600.00 $ 13.28 $ 929,600.00 $ 132,880.00 $ 597,680.00 $ 215,720.00 $ 331,920.00 $ 75,502.00 $ 116,172,00 $ 140,218.00 $ 215,748.00 Sales variable costs Contribution Margin Fixed costs Income (loss) before taxes Income taxes Net Income / (loss) ./ Choose denominator = Break Even point in dollars ./ Contribution marign ratio = Break Even point in dollars / 80.00% = $ 747,100.00 $2,324,000.00 $ 1,045,800.00 $1,278,200.00 $ 730,560.00 $ 547,640.00 $ 191,674.00 $ 355,966.00