The Millennium Company Produces Two Types of Products: Quality and Superior

question 22

Essay

The Millennium Company produces two types of products: Quality and Superior. The company expects to sell 1,200 units of Quality and 800 units of Superior.
A projected income statement for the firm as a whole follows: $\begin{array}{lr}\text { Sales } & £ 400,000 \\\text { Less: Variable costs } & 100,000 \\\text { Contribution margin } & £ 300,000 \\\text { Less: Fixed costs } & \overline{£ 25,000} \\\text { Operating income } & £ 25,000\end{array}$

a.Determine the break-even point in terms of sales revenue.
b.Determine the sales revenue necessary to generate a before-tax profit of £300,000.
c.Determine the sales revenue necessary to generate an after-tax profit of £270,000 if the tax rate is 40 per cent.

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Definitions:

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A phase of life characterized by full physical development, legal responsibility, and, typically, psychological maturity.

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