Compute the sales volume of each mower type needed to
(Multiproduct firm) Yard Bird manufactures commercial and residential riding lawnmowers. The company sells one commercial mower per three residential mowers sold. Selling prices for the commercial and residential mowers are, respectively, $5,600 and $1,800, and variable selling and production cost are, respectively, $3,800 and $1,000. The company’s annual fixed cost is $8,400,000. Compute the sales volume of each mower type needed to
a. break even.
b. earn $1,260,000 of income before tax.
c. earn $1,008,000 of income after tax, assuming a 40 percent tax rate.
d. earn 12 percent on sales revenue in pre-tax income.
e. earn 8 percent on sales revenue in after-tax income, assuming a 40 percent tax rate.
