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ABC Company 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 $350,000
The company sells three units of Product X for each two units it sells of Product Y. The company has a tax rate of 25%.
Question a. What is the breakeven point in units for each product, assuming the sales mix is 3 units of Product X for each two units of Product Y?
Question b. How many units of each product would be sold if the company desired an after-tax net income of $210,000, using its tax rate of 25%?
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