Chat with us, powered by LiveChat Kalifo Company Manufactures A Line Of Electric Garden Tools That Are Sold In General Harware Stores. The Company'scontroller, Sylvia Harlow,… | Writedemy

Kalifo Company Manufactures A Line Of Electric Garden Tools That Are Sold In General Harware Stores. The Company’scontroller, Sylvia Harlow,…

Kalifo Company Manufactures A Line Of Electric Garden Tools That Are Sold In General Harware Stores. The Company’scontroller, Sylvia Harlow,…

Kalifo Company manufactures a line of electric garden tools that are sold in general harware stores. The company’s
controller, Sylvia Harlow, has just received the sales forecast for the coming year for Kalifo’s three products:
weeders, hedge clippers, and leaf blowers. Kalifo has experienced considerable variations in sales volumes and
variable costs over the past two years, and Harlow believes that forecast should be carefully evaluated from a
cost-volume-profit viewpoint. The preliminary budget information for 20X8 is presented below.

Hedge Leaf
Weeders Clippers Blowers
Unit sales 59.000 59.000 118.000
Unit selling price, €/un. 28 36 48
Variable manufacturing cost per unit, €/un. 13,90 12,90 26,35
Variable selling cost per unit, €/un. 5,00 4,00 6,00
For 20X8, Kalifo’s fixed factory overhead is budgeted at 2.090.000 euro, and the company’s
fixed selling and administrative expenses are forecast to be 600.000 euro. Kalifo has profit tax rate
of 15 percent.
Required
1. Determine Kalifo Company’s budgeted net income for 20X8.
2. Assuming the sales mix remains as budgeted, determine how many units of each product Kalifo Company must
sell in order to break even in 20X8.
3. Determine the total euro sales Kalifo Company must have in 20X8 in order to earn a net income of 459.000
euro.

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