Assume that the company expects sales of each product to decline to 30,000 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
HENNA CO.
Forecasted Contribution Margin Income Statement
Product T Product O Total
Units $ Per unit Total $ Per unit Total
Sales $16.40 $16.40 $0 $0
Variable cost $9.84 0 $3.28 0 0
Contribution margin $6.56 0 $13.12 0 0
Fixed costs 210,240 564,480 (354,240)
Income before taxes (210,240) (210,240)
Income taxes (tax benefit)
Net income (loss)
Assume that the company expects sales of each product to increase to 68,000 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 shown with columns for each of the two products (assume a 32% tax rate). (Round "per unit" answers to 2 decimal places.)

HENNA CO.
Forecasted Contribution Margin Income Statement
Product T Product O Total
Units $ Per unit Total $ Per unit Total
Sales $16.40 $0 $16.40 $0 $0
Variable cost $9.84 0 3.28 0 0
Contribution margin $6.56 0 $13.12 0 0
Fixed costs 210,240 564,480 774,720
Income (loss) before taxes (210,240)
Income taxes (tax benefit)
Net income (loss) $(210,240)
Compute the break-even point in dollar sales for each product.

a. HENNA CO.  Forecasted Contribution Margin Income Statement

                                                                      Product T           Product O

Sales                                                               492,000            492,000

Variable cost                                                 (294,000)            (98,400)

Contribution margin                                       198,000             393,600

Fixed costs                                                     (210,240)           (564,480)

Income (loss) before taxes                              (12,240)            (170,880)

Income taxes (tax benefit)                                (3,968)              (54,682)

Net income (loss)                                              16,208              225,562

b. break-even point in dollar sales

Product T = $525,600  

Product O = $705,600

Explanation:

break-even point in dollar sales = Fixed Costs / Contribution Margin Ratio per unit

Product T    

break-even point in dollar sales = $210,240/ ($6.56/$16.40)

                                                     = $525,600

Product O    

break-even point in dollar sales = $564,480/ ($13.12/$16.40)

                                                     = $705,600

step 1: create a plan

step 2: inventory facility equipment/assets

step 3: create preventive maintenance procedures

step 4: create preventive maintenance schedules

step 5: train your maintenanceteam

step 6: analyze – adjust - improve

or

step 1 – pm procedure design: doing the effective things

step 2 – pm procedure scheduling: efficient use of people and resources

step 3 – pm lubrication engineering

step 4 – pm training: back on the chain gang

step 5 – pm program management plan

step 6 – communicate, communicate, communicate

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation: