Chapter 21 Hw -> Liezto.mheducation.com/hm.tpx Henna Co. produces and sells two

Question

Chapter 21 Hw -> Liezto.mheducation.com/hm.tpx Henna Co. produces and sells two products, T and O· lt manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 52,000 units of each product. Sales and costs for each product follow Sales Variable costs Product T Product O $842,400 842,400 168,480 673,920 Contribution margin Fixed costs 168,480 26,480 673,920 531,920 Income before taxes Income taxes (35% rate) 142,000 49,700 142,000 49,700 Net income $92,300 $ 92,300 2 value Required information 2.00 points You did not recelve credit for this question In a previous attempt Required 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) roduct ontribution Margin Ratio Choose Numerator: Contribution Margin Ratio Contribution margin ratio I Choose Denominator: Contribution margin Sales 168,480 S 842.400 20.00% reak-even point in dollars Choose Numerator: Choose Denominator: Break-Even Point in Dollars Sales Sales - Break-even point in dollars roduct ontribution Margin Ratio Contribution margin ratio Break-Even Point ollars - Break-even point in dollars 1:45 PM 4/10/2016 Search the web and Windows

Explanation / Answer

Product T

We are given sale = 842400

Contribution = 168480

Contribution margin ratio= Contribution / sales

= 168480 / 842400, =20 %

Fixed cost = 26480

Breakeven sale in dollars, = Fixed Cost / Contribution Margin ratio

= 26480 / 20 %, =132400

Product O

Sale = 842400

Contribution =673920

Contribution Margin Ratio = 673920 / 842400, =80 %

Fixed cost = 531920

Break even sales in Dollars = 531920 / 80%

= 664900

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