PB7. LO 3.4 Abilene Industries manufactures and sells three products (XX, YY, and ZZ). The sales price and unit variable cost for the three products are as follows: I Product A. B. XX YY ZZ Sales Price per Unit $75 60 55 Variable Cost per Unit $45 25 15 Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345,000 per year. What are total variable costs for Abilene with their current product mix? Calculate the number of units of each product that will need to be sold in order for Abilene 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.
PB7. LO 3.4 Abilene Industries manufactures and sells three products (XX, YY, and ZZ). The sales price and unit variable cost for the three products are as follows: I Product A. B. XX YY ZZ Sales Price per Unit $75 60 55 Variable Cost per Unit $45 25 15 Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345,000 per year. What are total variable costs for Abilene with their current product mix? Calculate the number of units of each product that will need to be sold in order for Abilene 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:### Break-Even Analysis for Abilene Industries
Abilene Industries manufactures and sells three products: XX, YY, and ZZ. Below are the sales prices and variable costs per unit for each product:
| Product | Sales Price per Unit | Variable Cost per Unit |
|---------|----------------------|------------------------|
| XX | $75 | $45 |
| YY | $60 | $25 |
| ZZ | $55 | $15 |
The sales mix for these products is reflected in a ratio of 4:2:1. The annual fixed costs shared by the three products are $345,000 per year.
**Questions:**
A. What are the total variable costs for Abilene with their current product mix?
B. Calculate the number of units of each product that will need to be sold in order for Abilene 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.
### Additional Details
The provided information includes a table showing the sales prices and variable costs for three products. The tasks involve calculating total variable costs, break-even units, and break-even sales dollars. It also requires demonstrating the break-even point using an income statement format.
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