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.