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: Product Sales Priceper Unit Variable Costper Unit AA $50 $35 BB 45 10 CC 30 5 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $253,000 per year. 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 ofUnits 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 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 $
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: Product Sales Priceper Unit Variable Costper Unit AA $50 $35 BB 45 10 CC 30 5 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $253,000 per year. 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 ofUnits 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 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 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
| Product | Sales Price per Unit |
Variable Cost per Unit |
| AA | $50 | $35 |
| BB | 45 | 10 |
| CC | 30 | 5 |
Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $253,000 per year.
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".
| 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 | $ |
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