Olivian Company wants to earn $420,000 in net (after-tax) income next year. Its product ispriced at $275 per unit. Product costs include: Direct materials                                 $90Direct labor                                       $65Variable overhead                             $16Total fixed factory overhead             $440,000 Variable selling expense is $14 per unit; fixed selling and administrative expense totals $290,000.Olivian has a tax rate of 40 percent.Required:1. Calculate the before-tax profit needed to achieve an after-tax target of $420,000.2. Calculate the number of units that will yield operating income calculated in Requirement 1above. (Round to the nearest unit.)

Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit: Direct labor $ 20,000 Direct materials 200,000 Variable overhead 30,000 Fixed overhead 40,000 Variable selling costs 10,000 Fixed selling costs 10,000 Total costs per unit $310,000 Required Each of these are separate situations: A. Prepare an income statement based on the information provided. B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs?

Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $200, labor is $600, variable overhead is $50, and fixed overhead is $40 (based on planned production for the year of 1,200 clocks).   Commissions are 10% of selling price, and fixed selling and administrative costs are $70,000. Guadalupe’s tax rate is 25%.   A European company has asked Guadalupe to accept a special order for 400 clocks. Due to some minor design changes, the material and labor costs for the special order clocks would increase by 25%. Another production run would have to be scheduled for the special order, since the clocks are different from the regular clocks, at a cost of $2,200. In addition, Guadalupe would have to hire a temporary clerk to process the ISO and export paperwork for shipping to Europe, at a cost of $600. Commissions will be paid at the rate of 5% of the special order…

Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate).   Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.