(CVP for multiple products case) Rowling Company produces and sells three products, product A, product B, and product C. Over the most recent five years, Rowling sold, on average, 30,000 units of A, 50,000 units of B, and 20,000 units of C, annually. The following information pertains to the prices and costs of the three products. ABC Price($)/unit $20 $40 $30 Variable costs ($)/unit $10 $24 $ 15 Fixed costs: $154,000 Target income $28,000 Instructions: Assume that the sales mix is maintained. a. What is the company's break-even point in terms of the number of units of each product? b. How many units of each product should be sold to earn the target income?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(CVP for multiple products case) Rowling Company produces and sells three products,
product A, product B, and product C. Over the most recent five years, Rowling sold, on average,
30,000 units of A, 50,000 units of B, and 20,000 units of C, annually. The following information
pertains to the prices and costs of the three products.
ABC
Price($)/unit $20 $40 $30
Variable costs ($)/unit $10 $24 $ 15
Fixed costs: $154,000
Target income $28,000
Instructions: Assume that the sales mix is maintained.
a. What is the company's break-even point in terms of the number of units of each product?
b. How many units of each product should be sold to earn the target income?
Transcribed Image Text:(CVP for multiple products case) Rowling Company produces and sells three products, product A, product B, and product C. Over the most recent five years, Rowling sold, on average, 30,000 units of A, 50,000 units of B, and 20,000 units of C, annually. The following information pertains to the prices and costs of the three products. ABC Price($)/unit $20 $40 $30 Variable costs ($)/unit $10 $24 $ 15 Fixed costs: $154,000 Target income $28,000 Instructions: Assume that the sales mix is maintained. a. What is the company's break-even point in terms of the number of units of each product? b. How many units of each product should be sold to earn the target income?
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