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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2-47 Multiproduct breakeven analysis and target profit, taxes Wren Company produces three (LO2, 3)
products with the following characteristics:
Planned unit sales
Price per unit..
Variable cost per unit
REGULAR CUSTOM DELUXE
13,000
$13
$6
10,000
$18
$9
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?
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