Snider Company produces and sells two products: A and B in the ratio of 3A to 5B. Selling prices for A and B are, respectively, $1,200 and $240; respective variable costs are $480 and $160. The company's fixed costs are $1,800,000 per year. Compute the volume of sales in units of each product needed to: Required: a. break even. b. earn $800,000 of income before income taxes. c. earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
Snider Company produces and sells two products: A and B in the ratio of 3A to 5B. Selling prices for A and B are, respectively, $1,200 and $240; respective variable costs are $480 and $160. The company's fixed costs are $1,800,000 per year. Compute the volume of sales in units of each product needed to: Required: a. break even. b. earn $800,000 of income before income taxes. c. earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Snider Company produces and sells two products: A and B in the ratio of 3A to 5B. Selling
prices for A and B are, respectively, $1,200 and $240; respective variable costs are $480
and $160. The company's fixed costs are $1,800,000 per year.
Compute the volume of sales in units of each product needed to:
Required:
a. break even.
b. earn $800,000 of income before income taxes.
c. earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
d. earn 12 percent on sales revenue in before-tax income.
е.
earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax
rate.
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