(Multiproduct firm) Elegant Books produces and sells two book products: an encyclopedia set and a dictionary set. The company sells these book sets in a ratio of three encyclopedia sets to five dictionary sets. Selling prices for the encyclopedia and dictionary sets are, respectively, $1,200 and $240; respective variable costs are $480 and $160. The company’s fixed costs are $1,800,000 per year. Compute the volume of sales of each type of book set needed to
a. break even.
b. earn $800,000 of income before tax.
c. earn $800,000 of income after tax, assuming a 30 percent tax rate.
d. earn 12 percent on sales revenue in before tax income.
e. earn 12 percent on sales revenue in after tax income, assuming a 30 percent tax rate.