PA6. Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Sales Price Variable Cost Product per Unit per Unit AA $50 $30 15 BB 40 CC 30 10 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $258,000 per year. A. What are total variable costs for Morris with their current product mix? B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. C. What is their break-even point in sales dollars? D. Using an income statement format, prove that this is the break-even point.

PA6. Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Sales Price Variable Cost Product per Unit per Unit AA $50 $30 15 BB 40 CC 30 10 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $258,000 per year. A. What are total variable costs for Morris with their current product mix? B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. C. What is their break-even point in sales dollars? D. Using an income statement format, prove that this is the break-even point.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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orris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Product Sales Priceper Unit Variable Costper Unit AA $55 $30 BB 45 15 CC 30 15 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $220,500 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $fill in the blank e0b38b060fef067_1 B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number ofUnits per Product AA fill in the blank e0b38b060fef067_2 BB fill in the blank e0b38b060fef067_3 CC fill in the blank e0b38b060fef067_4 C. What is their break-even point in sales dollars? Break-even point in sales $fill in the blank e0b38b060fef067_5 D. Using an income statement format, prove that this is the…
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