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Required information [The following information applies to the questions displayed below.) Henna Co. produces and sells...

Required information [The following information applies to the questions displayed below.) Henna Co. produces and sells two pRequired: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decima

Required information [The following information applies to the questions displayed below.) Henna 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 48,000 units of each product. Sales and costs for each product follow. Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (32% rate) Net income Product T $825, 600 577,920 247,680 113,680 134,000 42,880 $ 91,120 Product o $825,600 165, 120 660, 480 526, 480 134,000 42,880 $ 91, 120
Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.) Product T Contribution Margin Ratio Choose Numerator: 7 Choose Denominator: = Contribution Margin Ratio Contribution margin ratio Break-even point in dollars Choose Numerator: 7 Choose Denominator: = = Break-Even Point in Dollars Break-even point in dollars Producto Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollars Break-even point in dollars
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ReportAnswer #1

PRODUCT - T

   Contribution margin ratio = Contribution Margin / Sales

= 247,680 / 48,000

= 5.16%

Break-even point in dollars sales = Fixed cost / Contribution Margin Ratio

= 113,680 / 5.16%

= $ 2,203,100

PRODUCT - O

Contribution margin ratio = Contribution Margin / Sales

= 660,480 / 48,000

= 13.76%

   Break-even point in dollars sales = Fixed cost / Contribution Margin Ratio

    = 526,480 / 13.76%

= $ 3,826,163   

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