Question: Operating information for four different products sold by Kline Company follows: Common fixed costs are $270,000 and the income tax rate is 35%. 1. Determine
Operating information for four different products sold by Kline Company follows:
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Common fixed costs are $270,000 and the income tax rate is 35%.
1. Determine the revenues that Kline must achieve to break even.
2. Determine the number of units of each product that Kline must sell to break even, assuming the sales mix remains constant.
3. Determine the sales revenue needed to earn an after-tax profit of $1,625,000.
4. Determine the number of units of each product that must be sold for Kline to achieve an after-tax profit of $1,300,000.
Product A 1,000 Product D 100 Product B Product C 300 Units sold Sales Variable product costs Identifiable fixed product costs Variable selling/administrative Identifiable fixed selling/administrative 600 $1,080,000 $2,760,000 S500,000 $3,600,000 220,000 150,000 25,000 25,000 64,200 300,000 240,000 50,000 300,000 213,000 150,000 50,000
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