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    Kristel Anne Runas
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    The company produces products A and B in a 3:5 ratio and needs to determine the unit sales volume of each product to break even, earn different levels of income before and after taxes, and earn 12% of sales as income before and after taxes given fixed costs of $1.8M, variable costs of $480 and $160 for products A and B, and selling prices of $1,200 and $240.

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    The company produces products A and B in a 3:5 ratio and needs to determine the unit sales volume of each product to break even, earn different levels of income before and after taxes, and earn 12% of sales as income before and after taxes given fixed costs of $1.8M, variable costs of $480 and $160 for products A and B, and selling prices of $1,200 and $240.

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    © All Rights Reserved
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    9 views1 page

    Sales Mix Activity

    Uploaded by

    Kristel Anne Runas
    The company produces products A and B in a 3:5 ratio and needs to determine the unit sales volume of each product to break even, earn different levels of income before and after taxes, and earn 12% of sales as income before and after taxes given fixed costs of $1.8M, variable costs of $480 and $160 for products A and B, and selling prices of $1,200 and $240.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 1

    ACTIVITY- SALES MIX

    1. LORS Company produces and sells two products: A and B in the ratio of 3:5.
    Selling prices for A and B are, respectively, P 1,200 and P 240; respective
    variable costs are P 480 and P 160. The company fixed costs are P 1,800,000
    per year. Compute the volume of sales in units of each product needed to:

    • Break even
    • Earn 800,000 of income before income taxes
    • Earn 800,000 of income after taxes, assuming 30 percent tax rate
    • Earn 12 percent on sales revenue in before-tax income
    • Earn 12 percent on sales revenue in after-tax income, assuming a 30
    percent tax rate

    SOLUTION:

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