Required Informatlon IThe following Information appliles to the questions displa

Question

Required Informatlon IThe following Information appliles 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 42,000 units of each product Sales and costs for each product follow Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (32% rate) Net income ProductT 747,6ee 523,328 224,280 108,280 116,8ee 40,6ee Product o 747,6ee 149, 520 598,880 482,880 116,8ee 40,6ee $ 75,40e $ 75,40e Requirec 1. Compute the break-even polnt In dollar sales for each product. (Enter CM ratlo as percentage rounded to 2 declmal places.) ontribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio eak-even point in dollars Choose Denominator: Break-Even Point in Dollars Break-even point in dollars Margin Ratio Contribution margin ratio Break-even point in dollars

Explanation / Answer

1)PRODUCT -T      Contribution margin ratio = contribution margin/sale Contribution margin ratio = 224280/747600 =30% Break evenpoint in dollors = fixed cost/contribution margin ratio Break even point in dollars= 108280/0.30 360933.3333 PRODUCT O Contribution margin ratio = contribution margin/sales contribution margin ratio= 598080/747600 80% Break even point in dollars= Fixedcost/contribution margin Breakeven point in dollars= 482080/0.80 breakeven point in dollars= 602600 2 Contribution Margin Income Statement Product T Product O Particulars unit per unit total per unit Total Total Sales 25000 35.6 445000 35.6 445000 890000 less: variable cost 24.92 311500 7.12 89000 400500 Contribution margin 10.68 133500 28.48 356000 489500 less: Fixed Cost 108280 482080 590360 income before tax 25220 -126080 tax -8827 44128 net income /loss 16393 81952 Contribution Margin Income Statement Product T Product O Particulars unit per unit total per unit Total Total Sales 56000 35.6 996800 35.6 996800 1993600 less: variable cost 24.92 697760 7.12 199360 897120 Contribution margin 10.68 299040 28.48 797440 1096480 less: Fixed Cost 108280 482080 590360 income before tax 190760 315360 tax 66766 110376 net income /loss 123994 204984

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