Question - Letter 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 46,000 units of each product. Sales and costs for each product follow.
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Product T
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Product O
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Sales
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$800,400
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$800,400
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Variable costs
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640,320
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160,080
|
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Contribution margin
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160,080
|
640,320
|
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Fixed costs
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32,080
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512,320
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Income before taxes
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128,000
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128,000
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Income taxes (35% rate)
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44,800
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44,800
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Net income
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$83,200
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$83,200
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Required: Compute the break-even point in dollar sales for each product.