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AFL Boots Sells Only Two Products,Product X and Product Y

Question 186

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AFL Boots sells only two products,Product X and Product Y.
 Product X Product Y Total  Selling price $25$45 Variable cost per unit $20$35 Total fixed costs $350000\begin{array}{|l|c|c|c|} \hline& \text { Product } X & \text { Product } Y & \text { Total } \\\hline \text { Selling price } & \$ 25 & \$ 45 & \\\hline \text { Variable cost per unit } & \$ 20 & \$ 35 & \\\hline \text { Total fixed costs } & & & \$ 350000 \\\hline\end{array}
AFL Boots sells three units of Product X for each two units it sells of Product Y.The company has a tax rate of 25%.
Required:
a.What is the break-even point in units for each product,assuming the sales mix is 3 units of Product X for each two units of Product Y?
b.How many units of each product would be sold if AFL Boots desired an after-tax net profit of $210 000,using its tax rate of 25%?
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Correct Answer:

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a.3N = breakeven in product X 2N = break...

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