A. What are total variable costs for Morris with their current product mix? Total variable costs $ B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number of Units per Product AA BB CC C. What is their break-even point in sales dollars? Break-even point in sales $ D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
A. What are total variable costs for Morris with their current product mix? Total variable costs $ B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number of Units per Product AA BB CC C. What is their break-even point in sales dollars? Break-even point in sales $ D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![**Break-even Analysis Assignment**
**Objective:** Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
---
### Income Statement
**Sales**
- Product AA: $ [ ]
- Product BB: $ [ ]
- Product CC: $ [ ]
- **Total Sales:** $ [ ]
**Variable Costs**
- Product AA: $ [ ]
- Product BB: $ [ ]
- Product CC: $ [ ]
- **Total Variable Costs:** $ [ ]
**Contribution Margin:** $ [ ]
**Fixed Costs:** $ [ ]
**Net Income:** $ [ ]
---
*Note: Make sure to enter all amounts accurately. The goal is to demonstrate the calculation of the break-even point where net income equals zero, balancing total sales with total costs including variable and fixed costs.*
*A reminder: Break-even point in sales $ [ ]*
(End of assignment)
---
**Instructions for Use:**
Fill in the values accurately in the provided fields to calculate the break-even point effectively. This exercise will help students understand the relationship between sales, costs, and profitability.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b42eed3-4529-4a19-8e98-24541acb39fa%2Faeb92a58-278f-4eeb-b2b7-8f1c5c679517%2Fhgw1zyc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Break-even Analysis Assignment**
**Objective:** Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
---
### Income Statement
**Sales**
- Product AA: $ [ ]
- Product BB: $ [ ]
- Product CC: $ [ ]
- **Total Sales:** $ [ ]
**Variable Costs**
- Product AA: $ [ ]
- Product BB: $ [ ]
- Product CC: $ [ ]
- **Total Variable Costs:** $ [ ]
**Contribution Margin:** $ [ ]
**Fixed Costs:** $ [ ]
**Net Income:** $ [ ]
---
*Note: Make sure to enter all amounts accurately. The goal is to demonstrate the calculation of the break-even point where net income equals zero, balancing total sales with total costs including variable and fixed costs.*
*A reminder: Break-even point in sales $ [ ]*
(End of assignment)
---
**Instructions for Use:**
Fill in the values accurately in the provided fields to calculate the break-even point effectively. This exercise will help students understand the relationship between sales, costs, and profitability.
![**Morris Industries Case Study**
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for these products are as follows:
| Product | Sales Price per Unit | Variable Cost per Unit |
|---------|----------------------|------------------------|
| AA | $50 | $35 |
| BB | $40 | $15 |
| CC | $35 | $5 |
Their sales mix is reflected as a ratio of 5:3:2. The annual fixed costs shared by the three products are $231,000 per year.
**Questions and Tasks:**
**A.** What are the total variable costs for Morris with their current product mix?
- **Total variable costs:** $ [____]
**B.** Calculate the number of units of each product that will need to be sold in order for Morris to break even.
| Product | Number of Units per Product |
|---------|------------------------------|
| AA | [____] |
| BB | [____] |
| CC | [____] |
**C.** What is their break-even point in sales dollars?
- **Break-even point in sales:** $ [____]
**D.** Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
**Income Statement:**
[____]
**Note:** Ensure you use appropriate accounting formulas and calculations to solve the above tasks.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b42eed3-4529-4a19-8e98-24541acb39fa%2Faeb92a58-278f-4eeb-b2b7-8f1c5c679517%2Fj3sjf8b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Morris Industries Case Study**
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for these products are as follows:
| Product | Sales Price per Unit | Variable Cost per Unit |
|---------|----------------------|------------------------|
| AA | $50 | $35 |
| BB | $40 | $15 |
| CC | $35 | $5 |
Their sales mix is reflected as a ratio of 5:3:2. The annual fixed costs shared by the three products are $231,000 per year.
**Questions and Tasks:**
**A.** What are the total variable costs for Morris with their current product mix?
- **Total variable costs:** $ [____]
**B.** Calculate the number of units of each product that will need to be sold in order for Morris to break even.
| Product | Number of Units per Product |
|---------|------------------------------|
| AA | [____] |
| BB | [____] |
| CC | [____] |
**C.** What is their break-even point in sales dollars?
- **Break-even point in sales:** $ [____]
**D.** Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
**Income Statement:**
[____]
**Note:** Ensure you use appropriate accounting formulas and calculations to solve the above tasks.
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