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What is the breakeven point in units for each product

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Reference no: EM132806406

FARR ceramics sells only two types of plates, Gold ware and White ware.

                   Gold ware              White ware        Total

Selling price          Tk25              Tk45

Variable cost per unit  Tk20         Tk35

Total fixed costs                                                 Tk350,000

FARR ceramics sells three units of Gold ware for each two units it sells of White ware. FARR ceramics has a tax rate of 25%.

Required:

Problem a. What is the breakeven point in units for each product, assuming the sales mix is 3 units of Gold ware for each two units of White ware?

Problem b. How many units of each product would be sold if FARR ceramics desired an after-tax net income of Tk210,000, using its tax rate of 25%?

Therefore, to meet the profit goal, 3 × N = 54,000 units of Product X and 2 × N = 36,000 units of Product Y need to be sold.

Reference no: EM132806406

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