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Evergreen Technologies manufactures and sells two products, A-100 and B-200. The current product information is below A-100 B-200 $120 $150 Selling price per unit Variable cost per unit Annual volume 80 15,000 60 25,000 Total fixed costs are $1,710,000 Required: 1. What was the break-even point in units for each product, and in total, assuming the same sales mix as above? 2. How many units of each product would Evergreen need to sell if they desired an after-tax profit of $1,000,000. Assume a 20% tax rate. 3. To stimulate sales next year, Evergreen is considering a digital marketing campaign to attract new customers. The company estimates the total cost would be $100,000. Assuming the unit selling price and all other costs remain the same as above, and that the company wants to increase current operating income by 15%, how many units of each product must Evergreen sell? Do you think this is a viable option?

Evergreen Technologies manufactures and sells two products, A-100 and B-200. The current product information is below A-100 B-200 $120 $150 Selling price per unit Variable cost per unit Annual volume 80 15,000 60 25,000 Total fixed costs are $1,710,000 Required: 1. What was the break-even point in units for each product, and in total, assuming the same sales mix as above? 2. How many units of each product would Evergreen need to sell if they desired an after-tax profit of $1,000,000. Assume a 20% tax rate. 3. To stimulate sales next year, Evergreen is considering a digital marketing campaign to attract new customers. The company estimates the total cost would be $100,000. Assuming the unit selling price and all other costs remain the same as above, and that the company wants to increase current operating income by 15%, how many units of each product must Evergreen sell? Do you think this is a viable option?

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Evergreen Technologies manufactures and sells two products, A-100 and B-200. The current product information is below. A-100 B-200 $120 80 Selling price per unit Variable cost per unit Annual volume Total fixed costs are $1,710,000 Required: 1. What was the break-even point in units for each product, and in total, assuming the same sales mix as above? 2. How many units of each product would Evergreen need to sell if they desired an after-tax profit of $1,000,000. Assume a 20% tax rate. $150 15,000 60 25,000 3. To stimulate sales next year, Evergreen is considering a digital marketing campaign to attract new customers. The company estimates the total cost would be $100,000. Assuming the unit selling price and all other costs remain the same as above, and that the company wants to increase current operating income by 15%, how many units of each product must Evergreen sell? Do you think this is a viable option?
Transcribed Image Text:Evergreen Technologies manufactures and sells two products, A-100 and B-200. The current product information is below. A-100 B-200 $120 80 Selling price per unit Variable cost per unit Annual volume Total fixed costs are $1,710,000 Required: 1. What was the break-even point in units for each product, and in total, assuming the same sales mix as above? 2. How many units of each product would Evergreen need to sell if they desired an after-tax profit of $1,000,000. Assume a 20% tax rate. $150 15,000 60 25,000 3. To stimulate sales next year, Evergreen is considering a digital marketing campaign to attract new customers. The company estimates the total cost would be $100,000. Assuming the unit selling price and all other costs remain the same as above, and that the company wants to increase current operating income by 15%, how many units of each product must Evergreen sell? Do you think this is a viable option?
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