2-47 Multiproduct breakeven analysis and target profit, taxes Wren Company produces three products with the following characteristics: Planned unit sales Price per unit Variable cost per unit. REGULAR CUSTOM 13,000 $13 $6 10,000 $18 $9 DELUXE 8,000 $21 $15 Total fixed costs at Wren Company are $200,000 per year. Required (a) Assuming a constant sales mix, how many units of each of the three products must Wren Company sell in order to break even? (b) Assuming a constant sales mix, if Wren Company faces a tax rate of 30% and has a target after-tax income of $50,000, how many units of each of the three products must Wren Com- pany sell? (LO2, 3)

2-47 Multiproduct breakeven analysis and target profit, taxes Wren Company produces three products with the following characteristics: Planned unit sales Price per unit Variable cost per unit. REGULAR CUSTOM 13,000 $13 $6 10,000 $18 $9 DELUXE 8,000 $21 $15 Total fixed costs at Wren Company are $200,000 per year. Required (a) Assuming a constant sales mix, how many units of each of the three products must Wren Company sell in order to break even? (b) Assuming a constant sales mix, if Wren Company faces a tax rate of 30% and has a target after-tax income of $50,000, how many units of each of the three products must Wren Com- pany sell? (LO2, 3)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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