Reference no: EM132632328

Question - York Homes Inc. (YHI) manufactures a broad line of consumer kitchen products. They have a division that sells two types of blenders, regular and designer. The cost of the two models can be seen below:

Regular Designer

Sales Price $33 $38

Materials Cost $10 $11

Labor Cost $5 $6

Variable Overhead Cost $2 $3

YHI expects sales to be 36,000 of the regular model and 24,000 of the designer model. If sales volumes change, sales mix is expected to be constant.

The fixed manufacturing cost is $650,000 and fixed other costs are $190,000.

A) What will be YHI breakeven units?

B) What operating income will YHI expect if it proceeds with its planned production?

C) If YHI inc. has a tax rate of 30%, how many units of each product will the company have to sell in order to earn an after-tax income of $58,800

D) The sales manager believes that a better product mix will be 70% regular model and 30% designer model. Fixed costs will drop by $50,000 with this change. If 60,000 units are still expected to be sold in total, is this change financially desirable?