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 58,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 974,400 $ 974,400 Variable costs 779,520 194,880 Contribution margin 194,880 779,520 Fixed costs 46,880 631,520 Income before taxes 148,000 148,000 Income taxes (32% rate) 47,360 47,360 Net income $ 100,640 $ 100,640 3. Assume that the company expects sales of each product to increase to 72,000 units next year with no change in unit selling price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate). (Round "per unit" answers to 2 decimal places.)
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 58,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 974,400 $ 974,400 Variable costs 779,520 194,880 Contribution margin 194,880 779,520 Fixed costs 46,880 631,520 Income before taxes 148,000 148,000 Income taxes (32% rate) 47,360 47,360 Net income $ 100,640 $ 100,640 3. Assume that the company expects sales of each product to increase to 72,000 units next year with no change in unit selling price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate). (Round "per unit" answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
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 58,000 units of each product. Sales and costs for each product follow.
| Product T | Product O | ||||||||
| Sales | $ | 974,400 | $ | 974,400 | |||||
| Variable costs | 779,520 | 194,880 | |||||||
| Contribution margin | 194,880 | 779,520 | |||||||
| Fixed costs | 46,880 | 631,520 | |||||||
| Income before taxes | 148,000 | 148,000 | |||||||
| Income taxes (32% rate) | 47,360 | 47,360 | |||||||
| Net income | $ | 100,640 | $ | 100,640 | |||||
3. Assume that the company expects sales of each product to increase to 72,000 units next year with no change in unit selling price. Prepare
Transcribed Image Text:HENNA CO.
Forecasted Contribution Margin Income Statement
Product T
Product O
Total
Units
$ Per unit
Total
S Per unit
Total
Sales
Variable cost
Contribution margin
Fixed costs
Income (Loss) before taxes
income taxes (tax benefit)
Net income (loss)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education