#1 Letterman Company produces and sells two products: A and B in


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#1 Letterman Company produces and sells two products: A and B in the ratio of 3A to 5B. Selling prices for A and B are, respectively, $1,200 and $240; respective variable costs are $480 and $160. The company’s fixed costs are $1,800,000 per year. Compute the volume of sales in units of each product needed to: Required: a. break even. b. earn $800,000 of income before income taxes. c. earn $800,000 of income after income taxes, assuming a 30 percent tax rate. d. earn 12 percent on sales revenue in before-tax income. e. earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate. #2 Kennedy Company has the following collection pattern for its accounts receivable: 40 percent in the month of sale 50 percent in the month following the sale 8 percent in the second month following the sale 2 percent uncollectible The company has recent credit sales as follows: April: $200,000 May: 420,000 June: 350,000 How much should the company expect to collect on its receivables in June? mily6
posted a question ยท May 06, 2014 at 10:22pm

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