Question: Need help with D) & E) please! Multiple Product Planning with Taxes In the year 2008, Wiggins Processing Company had the following contribution income statement:

Need help with D) & E) please!

Multiple Product Planning with Taxes In the year 2008, Wiggins Processing Company had the following contribution income statement:

WIGGINS PROCESSING COMPANY Contribution Income Statement For the Year 2008
Sales $1,000,000
Variable costs
Cost of goods sold $440,000
Selling and administrative 200,000 (640,000)
Contribution margin 360,000
Fixed Costs
Factory overhead 190,000
Selling and administrative 80,000 (270,000)
Before-tax profit 90,000
Income taxes (39%) (35,100)
After-tax profit $54,900

HINT: Round the contribution margin ratio to two decimal places for your calculations below.

(a) Determine the annual break-even point in sales dollars. 750,000

(b) Determine the annual margin of safety in sales dollars. 250,000

(c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $36,000? 850,000

(d) With the current cost structure, including fixed costs of $270,000, what dollar sales volume is required to provide an after-tax net income of $150,000?

Do not round until your final answer. Round your answer up to the nearest dollar. $Answer

(e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income.

Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers.

WIGGINS PROCESSING COMPANY Income Statement For the Year 2008
Sales Answer

Variable costs Answer

Contribution margin Answer

Fixed costs 270,000

Net income before taxes Answer

Income taxes (39%) Answer

Net income after taxes 150,000

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