Carson Company produces and sells two products: A and B in the ratio of 3A to 5B.Selling prices for A and B are,respectively,$1,200 and $240;respective variable costs are $480 and $160.The company's fixed costs are $1,800,000 per year.
Compute the volume of sales in units of each product needed to:
Required:
a. break even.
b. earn $800,000 of income before income taxes.
c. earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
d. earn 12 percent on sales revenue in before-tax income.
e. earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.

Question

Carson Company produces and sells two products: A and B in the ratio of 3A to 5B.Selling prices for A and B are,respectively,$1,200 and $240;respective variable costs are $480 and $160.The company's fixed costs are $1,800,000 per year.
Compute the volume of sales in units of each product needed to:
Required:
a.	break even.
b.	earn $800,000 of income before income taxes.
c.	earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
d.	earn 12 percent on sales revenue in before-tax income.
e.	earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.

Quizplus · Accepted Answer

The Answer of Carson Company produces and sells two products: A and B in the ratio of 3A to 5B.Selling prices for A and B are,respectively,$1,200 and $240;respective variable costs are $480 and $160.The company's fixed costs are $1,800,000 per year.
Compute the volume of sales in units of each product needed to:
Required:
a.	break even.
b.	earn $800,000 of income before income taxes.
c.	earn $800,000 of income after income taxes, assuming a 30 percent tax rate.
d.	earn 12 percent on sales revenue in before-tax income.
e.	earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.

Carson Company Produces and Sells Two Products: a and B