problem 21-5A Part 2

Problem 21-5A Break-even analysis, different cost structures, and income calculations LO C2, A1, P4 The following information applies to the questions displayed below. 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. Sales Variable costs Contribution sargin Fixed costs Income before taxes Income taxes (328 rate) Net income $974,400 779,520 194, 880 6,880 148,000 7,360 $100,640 974,400 194,880 779,520 631,520 148,000 47,360 $100, 640 Problem 21-5A Part 2 2. Assume that the company expects sales of each product to decline to 41,000 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 as just shown with columns for each of the two products (assume a 32% tax rate). Also, assume that any loss before taxes yields a 32% tax benefit. Round "per unit" answers to 2 decimal places. Enter losses and tax benefits, If any, as negative values.) HENNA C Problem 21-5A Part 2 2. Assume that the company expects sales of each product to decline to 41,000 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 as just shown with columns for each of the two products (assume a 32% tax rte). Also, assume that any loss before taxes yields a 32% tax benefit. Round "per unit" answers to 2 decimal places. Enter losses and tax benefits, If any, as negative values) HENNA . Forecasted Contribution Margin Income Statement Product T Units $ Per unit Total $ Per unit Product o Total Total Sales 41,000 41,000 41,000 0 cost Contribution margin 0 costs Income before taxes taxes (tax benefit) Net income (loss)