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Problem 21-5A 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 49,000 units of each product. Sales and costs for each product follow Product TProduct o Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (32% rate) Net income $ 837,900 837,900 670,320 83,790 754,110 617.110 137,000 54,800 $ 82,200 82,200 167,580 30,580 137,000 54,8002. Assume that the company expects sales of each product to decline to 32,000 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 40% tax rate). Also, assume that any loss before taxes yields a 40% tax benefit. (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 ProductT Product O Total Units $ Per unit Total $Per unit Total 32,000 32,000 32,000 Sales riable cost Contribution margin ixed costs ncome before taxes ncome taxes (tax benefit) Net income (loss)3. Assume that the company expects sales of each product to increase to 63,000 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 40% tax rate). (Round per unit answers to 2 decimal places.) HENNA Co Forecasted Contribution Margin Income Statement Product T Product O Total Units $ Per unit Total $Per unit Total Contribution margin Net income (loss)

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HENINA CO Sales Per UnitTotal Sales In $ Forecasted Contribution Margin Income Statement Sales Quntity Product1T Product O Total Units Per unit TotalPer Unit total Product T 857300 Sales (A) Variable Cost (B) Contribution Margin (C)(A-B) Fixed Costs (D) Income Before Taxes( E)(C-D) Income Tax (Tax benefit) (F)(40%ofE) Net Income(Loss)(G) (E-F) 17 1.7 547 17.1 547200 13.68 437760 3.42 109440 30580 78860 31544 47316 49000 492 60192 647 -457 547 15.39 492 17.1 617110 12463 -49852 74778 Product O- 837900 18308 49000 27462 17.1 Variable cost Per Unit Total Variable Cost Sales Quntity ProductT 670320 49000 13.68 Product O 83790 49000 1.71

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