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Delaware manufacturing company sells two products , product A and product B

Product A Product B Total
Selling price $40 $50 ?
Variable cost per unit $24 $40 ?
Total Fixed Cost ? ? $840,000

Delaware manufacturing sells two units of the product A for each unit it sells of product B. Delaware Manufacturing faces a tax rate of 30%.

Required

a) What is the breakeven point in units for each product assuming the sales mix is 2 units of the product A for each unit of product B?

b) What is the breakeven point if Delaware Manufacturing’s tax rate is reduced to 25%, assuming the sales mix is 2 units of product A for each unit of product B?

c) How many units of each product would be sold if Delaware Manufacturing desired an after tax net income of $ 73,500, Facing a tax rate of 30%

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M9412106

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