Reference no: EM132660127

Product   Sales price per unit       Variable Costs per unit

A               $80                                   $64

B                $140                           $98

J&H Inc. sells two products, Product A and Product B. The sales volume for a typical year is as follows: Product A 18,000 units and Product B 4,500 units

Assume the following sales prices and variable costs:

Fixed costs are $424,000 per year and the tax rate is 40%. Assume the sales mix stays constant as the sales volume changes.

Required:

Question 1: Determine the breakeven point in total units and units of each product.

Question 2: Calculate the total breakeven point in sales dollars for Product A and Product B.

Question 3: Assume the original facts except that the fixed costs are increased to $466,400. Calculate the new breakeven point in units and sales dollars for each product.

Question 4: Assume the original facts except that the variable costs are increased by 10% for each product. Calculate the new breakeven point in units and sales dollars for each product. Assume the sales mix stays constant.

Question 5: Assume the original facts and that J&H wants a before tax target profit for the company of $477,000. Calculate the level of sales needed in units and sales dollars for each product to reach the target profit.

Question 6: Assume the original facts and that J&H wants an after tax target profit for the company of $300,000. Calculate the level of sales needed in units and sales dollars for each product to reach the target profit.