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: Morris Industries data Product Sales Price per Unit Variable Cost per Unit AA $42 $34 BB 64 38 CC 81 47 Their sales mix is reflected as a ratio of 10:1:2. Annual fixed costs shared by the three products are $330,092 per year. What is their break-even point in sales dollars? Do not round until submitting your final answer. Round to the whole dollar, no decimals.

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: Morris Industries data Product Sales Price per Unit Variable Cost per Unit AA $42 $34 BB 64 38 CC 81 47 Their sales mix is reflected as a ratio of 10:1:2. Annual fixed costs shared by the three products are $330,092 per year. What is their break-even point in sales dollars? Do not round until submitting your final answer. Round to the whole dollar, no decimals.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Lablanc Inc. sells a product for $60 per unit. The variable cost is $34 per unit, while fixed cost are $108,160. Determine (a) the break-even point in sales unit (b) the break-even point if the selling price weee increases to $66 per unit.
Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 18,320 80% B 4,580 20 Total 22,900 100% Assume the following unit selling prices and unit variable costs: Product Selling Price Variable Cost Contribution Margin A $ 90 $ 75 $ 15 B 150 110 40 Fixed costs are $420,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. --Assume the original facts except that now fixed costs are expected to be $42,000 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units? How does…
A company has set its initial selling price at $28 per unit. Its variable manufacturing costs are $10 per unit produced. Its variable selling and administrative costs are $2 per unit sold. The company’s fixed manufacturing costs are $300,000 per period and its fixed selling and administrative costs are $150,000 per period. The company’s target profit is $200,000 per period. What is the breakeven point in units? What is the breakeven point in dollars? How many units must be sold to achieve the target profit? If the fixed costs increase by 20%, how many units must be sold to achieve the target profit?
Atlantic Company sells a product with a break-even point of 6,148 sales units. The variable cost is $71 per unit, and fixed costs are $178,292. Determine the following:
igelow Inc. sells a product for $1,200 per unit. The variable cost is $816 per unit, while fixed costs are $3,120,000. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $1,232 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $1,232 per unit
Sunn Company manufactures a single product that sells for $210 per unit and whose variable costs are $168 per unit. The company's annual fixed costs are $575,400. (a) Compute the company's contribution margin per unit. Contribution margin (b) Compute the company's contribution margin ratio. 1 Numerator: (c) Compute the company's break-even point in units. 1 1 Numerator: Denominator: Numerator: Denominator: (d) Compute the company's break-even point in dollars of sales. 1 1 Denominator: II Contribution Margin Ratio Contribution margin ratio Break-Even Units Break-even units 0 Break-Even Dollars Break-even dollars 4
Fine Leather Enterprises sells its single product for $129.00 per unit. The firm’s fixed operating costs are $473,000 annually, and its variable operating costs are $86.00 per unit. a. Find the firm’s operating break-even point in units. b. Label the x-axis “Sales (units)” and the y-axis “Costs/Revenues ($),” and then graph the firm’s sales revenue, total operating cost, and fixed operating cost functions on these axes. In addition, label the operating break-even point and the areas of loss and profit (EBIT).
Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $652,800 per year. Hawaiian Fantasy $ 30 $21 30,000 Tahitian Joy $ 100 $ 25 6,000 Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $18 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…
Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products (assume a 32% tax rate). Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.