Question: Accounting 2 question, 5 stars for correct answer. Thanks! Problem 18-5A Break-even analysis, different cost structures, and income calculations LO C2, A1, P4 [The following
Accounting 2 question, 5 stars for correct answer. Thanks!
Problem 18-5A Break-even analysis, different cost structures, and income calculations LO C2, A1, P4
[The following information applies to the questions displayed below.]
| Vanna 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 40,000 units of each product. Sales and costs for each product follow. |
| Product T | Product O | |||||||||
| Sales | $ | 720,000 | $ | 720,000 | ||||||
| Variable costs | 576,000 | 144,000 | ||||||||
| Contribution margin | 144,000 | 576,000 | ||||||||
| Fixed costs | 34,000 | 466,000 | ||||||||
| Income before taxes | 110,000 | 110,000 | ||||||||
| Income taxes (32% rate) | 35,200 | 35,200 | ||||||||
| Net income | $ | 74,800 | $ | 74,800 | ||||||
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Problem 18-5A Part 3
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